Palantir’s
relentless rise may be about to end
A
pushback to the tech giant’s politics may threaten the core of its $476 billion
business embedded in war zones, government offices and on factory floors.
Alex Karp
has backed Donald Trump’s immigration crackdown, called his company “completely
anti-woke”, boasted that its tools kill US enemies and republished a
“manifesto” that calls for Silicon Valley technologists to be deployed in the
fight against urban crime. Bethany Rae
Joe
Miller, George Hammond and Chris Cook
Jul 12,
2026 – 5.00am
The week
after a US immigration enforcement officer killed an American mother of three
on the streets of Minneapolis in January, Palantir’s head of “strategic
engagement” posted on social media a slickly produced, AI-generated video set
to a music track called Clubbed to Death.
In a
series of flash frames, it featured the logo of the company – whose data
intelligence platforms are used by the Trump administration to detain and
deport migrants – in the midst of a cultist circle, alongside images of the
grim reaper, a blood-soaked crucifix, all-seeing eyes and the mysterious slogan
“Recon is watching you”.
Some
Palantir staff, already concerned about their employer’s enthusiastic embrace
of Donald Trump’s policies and its defence of Israel’s war in Gaza, were
appalled. “The company had an absolute internal meltdown,” recalls one former
employee, who watched the dispute erupt on an internal messaging platform. “You
had people being like: ‘My customer is a children’s hospital – how am I
supposed to explain this to them?’”
The video
was taken down within days. But the episode encapsulated the deepening disquiet
within the ranks of the $US330 billion ($476 billion) company, which has
become, if protests and political outrage are any measure, one of the most
controversial tech groups in the world.
Its
growing notoriety, insiders and investors fear, will imperil its core business
with the US government, drive away corporate customers and threaten a business
model based on retaining skilled engineers who are already being wooed by
deep-pocketed AI start-ups.
In the
years following its founding in 2003 with a mission to help defend the West
from another 9/11-style terrorist attack, Palantir single-handedly
revolutionised the US defence industry.
‘A
perfect storm is brewing’
It did so
in part by creating a new role: the “forward-deployed engineer”, embedded in
war zones or placed on factory floors, who catered to the needs of clients
ranging from police forces to chemicals groups and adapted Palantir’s platforms
to suit.
With such
engineers and its advanced technology, Palantir helped build software programs
that, according to those who have used them, saved lives on the battlefield and
helped bring an end to the COVID-19 pandemic.
But it
simultaneously cultivated an aura of inscrutability as it shunned the press,
providing fodder for fears of mass surveillance in the AI age and exacerbating
criticism over its work with soldiers and law enforcement.
Indeed,
Palantir named itself after the far-seeing orbs in Tolkien’s The Lord of the
Rings and emphasised its connections with the CIA, an early funder and core
client.
In the
US, it is now so radioactive that Democratic candidates have felt compelled to
sell even small stakes in the group and return donations from those associated
with it. Across Europe, doors once open to Palantir in London, Paris or Zurich
have been slammed firmly shut.
Now,
according to the polls, the Democrats are on course to win back the House of
Representatives in November, after which they would have the powers to compel
Palantir executives to answer questions under oath and hand over internal
records – powers that senior members of the party told the Financial Times they
fully intended to use.
If
Democrats then took the White House in 2028, the company’s vituperative critics
would be in charge of its biggest customer, the US Department of Defence, and
come under pressure to cancel more than $US10 billion worth of contracts.
Palantir’s
stock, which skyrocketed in the first year of Trump’s second term as president,
has lost nearly a quarter of its value so far this year amid an assault by
short sellers who believe that the company is vulnerable to increased
competition from AI labs, could lose more top-level talent to the likes of
OpenAI and is massively overvalued.
Some of
Palantir’s leaders, notably its outspoken chief executive, Alex Karp, have also
been supplying its detractors with ammunition. In recent months, Karp has
backed Trump’s immigration crackdown, called his company “completely
anti-woke”, boasted that its tools kill US enemies and republished a
“manifesto” that calls for Silicon Valley technologists to be deployed in the
fight against urban crime.
The
tactics that fuelled Palantir’s relentless rise have, according to some
insiders, become a liability. In the words of one recently departed senior
employee, the company’s leaders have manoeuvred themselves into a situation
where “a perfect storm is brewing”.
The group
– which declared worldwide staff of 4429 in a December 2025 filing – has also
lost more than five dozen experienced engineers to the likes of Anthropic and
OpenAI over the past year, according to an analysis of LinkedIn data by
Harnham, a recruitment firm that specialises in AI talent.
This
account of the turmoil inside Palantir is based on interviews with more than 20
current and former employees, executives, investors and advisers. Almost all –
supporters and critics alike – agreed on one thing: some of the company’s woes
are self-inflicted.
Turning
data into gold
For a
long time, Palantir’s notoriety was a selling point. The start-up’s central, if
prosaic, proposition was to clean up the mess made by the digital age, enabling
incompatible databases to talk to one another.
Yet its
public relations strategy was deliberately clandestine. In the words of a
former employee, it “ignored everything at all times”, rarely engaging with the
media and letting conjecture fill the gaps. “To get early customers excited
they had to present themselves as this all-knowing oracle,” says one investor.
“That was necessary to get folks to take them seriously.”
Clients
did take them seriously. After the 2008 financial crisis, Palantir won
contracts from cash-strapped governments desperate to improve the delivery of
public services, which it promised to do more cheaply than the alternatives.
Corporates followed: in the mid-2010s Palantir signed up Airbus, BP, Ferrari
and major investment banks, for which, through a suite of increasingly useful
tools, it turned raw data into economic power.
US
President Donald Trump with Palantir founder Peter Thiel and Apple chief Tim
Cook in 2016. AP
The
strategy paid off in 2024, when the company posted its first annual profit.
Just over a year later, Palantir’s growth was supercharged by Trump’s return to
the White House.
Several
Palantir employees went into the Trump administration, including Gregory
Barbaccia, who became the chief information officer for the entire federal
government in January 2025. Palantir alumni helped staff Elon Musk’s so-called
Department of Government Efficiency, or DOGE, which slashed US aid spending and
fired thousands of federal workers.
Concurrently,
the company’s US government work prospered. In the 12-month period following
Trump’s return to office, its revenue from federal contracts soared to nearly
$US2.2 billion, a 65 per cent increase on the previous year.
The
company’s commercial business seemed to benefit too – its revenue more than
doubled year on year. Palantir’s stock, which had been in the doldrums since
the company’s 2020 IPO, was one of the best performing on the S&P 500 in
2025, surging about 135 per cent.
But while
Palantir was becoming one of the biggest corporate winners of the Trump era,
its success was increasingly inseparable from the controversial policies
enabled by its technology, such as tracking undocumented migrants and drone
warfare.
Trump-aligned
culture warriors
As
recently as 2020 the company “purposefully” declined to work with Immigration
and Customs Enforcement’s deportation arm over the risk of disproportionate
enforcement. That guardrail was now gone.
Even
during the Biden administration, insiders including the head of Palantir’s
privacy and civil liberties team, Courtney Bowman, warned about the risks of
appearing ever more political. Executives later cautioned that Karp’s 2025 book
The Technological Republic, which accused American allies of
“self-righteousness”, would complicate its growth strategy in Europe and deepen
the company’s dependency on the US.
Palantir
and those associated with it increasingly picked a side in the culture wars and
intervened more directly in politics. Joe Lonsdale, a Palantir co-founder
turned MAGA mega-donor who hosts fundraisers for vice-president JD Vance,
called for the return of public hangings and suggested the company was founded
to fight “commies”.
Karp
publicly embraced the “disruption” caused by DOGE, telling investors on an
earnings call that “some people are going to get their heads cut off” due to
the initiative.
Shyam
Sankar, the company’s chief technology officer, and architect of the
forward-deployed engineer model, joined the US Army reserves and praised Trump
as “a founder who can ... lead us to a new golden age”. (Sankar was also given oversight of
Palantir’s US
government business.)
Most
rank-and-file Palantirians do not share the Trump administration’s politics.
Federal records show a majority of donations worth more than $US200 made by US
employees in 2024 went to Democrats, as in previous election cycles. Karp
himself donated to Joe Biden’s campaign and in 2024 said he was “voting against
Trump”.
But the
public increasingly perceives Palantir as a Trump-aligned organisation.
“Historically, Karp and most others at the company were to the left,” says one
former employee who worked on US government projects, adding there is no longer
“anyone credible who can speak for the company who isn’t to the right”.
Palantir’s
closeness to the Trump administration and the MAGA movement has had
ramifications far beyond Washington.
The
company is facing widespread resistance in Europe, with government agencies in
Switzerland, Germany and France rejecting or replacing its tools due to
political and sovereignty concerns.
In the
UK, Palantir’s biggest market outside the US, London mayor Sadiq Khan blocked a
£50 million ($96 million) contract last month with the Metropolitan Police. The
Labour government is reviewing a £330 million deal with the NHS, although the
company remains embedded in several UK intelligence agencies.
In the
US, concrete actions against Palantir have been confined to towns and cities
and smaller clients such as New York hospitals – but the political backlash has
been severe. Democratic senators including Elizabeth Warren last year accused
Palantir of making “huge profits by enabling violations of human rights by
authoritarian governments” and pledged to investigate. A progressive pressure
group, Purge Palantir, has secured commitments from a dozen Democrats to refuse
or return Palantir-linked contributions.
The
criticism is not confined to the left – it has also come from Republicans in
Congress, MAGA figures such as Steve Bannon, Tucker Carlson and right-leaning
podcasters including Theo Von.
The
company is bracing for a reckoning. In the past few months, it has quietly
hired several Democratic-aligned lobbyists, including a former Democratic
senator, Mark Begich, in anticipation of being hauled on to Capitol Hill if
Republicans are forced to hand over the gavel.
“I expect
we’ll be spending a lot of time with our right hands in the air,” says one
Palantir adviser, referring to oaths sworn before congressional committees.
In the
meantime, Palantir has sought to emphasise that it empowers liberal democratic
institutions that are accountable to the general public and that it is “neither
conducting nor enabling mass surveillance of American citizens”. It has pointed
out that its Immigration and Customs Enforcement work began under the Obama
administration and was extended under Biden.
“For over
20 years, and across five administrations, Palantir has been proud to work with
the US government and its allies to strengthen national security and deliver
public services effectively and efficiently,” the company told the FT.
Chief
technology officer Shyam Sankar praises Donald Trump as a founder “who can . . . lead us to a new golden age”. Bloomberg
It has
highlighted its work with NATO and Ukraine and its life-saving medical tech.
But it has also complained in a recent regulatory document about “recurring
mischaracterisations and inaccuracies” about its work, lamenting that its
attempts to change the narrative are often falling on deaf ears.
“I won’t
stop demanding answers until we get them from big corporations like Palantir
that are profiting off of Trump’s cruel mass deportation agenda,” Democratic
congressman Dan Goldman, a former lawyer on Trump’s impeachment, warned in May.
‘We don’t
care’
Some
investors are growing uneasy. Last year, the Netherlands’ largest pension fund,
ABP, sold €825 million ($1.3 million) in Palantir shares, citing concerns over
the company’s contracts with ICE and its work in conflict zones.
In early
June, Norway’s $US2.3 trillion wealth fund, which had recently increased its
stake in Palantir, urged fellow shareholders to vote for two proposals that
would force the company to address potential human rights violations enabled by
its work with the Pentagon, the Israel Defence Forces and US immigration. (The
measure was opposed by the board and failed, despite winning support from
almost 60 per cent of external shareholders.)
Privately,
however, some investors trace Palantir’s recent turbulence back to the
transformation of a single figure: chief executive Karp.
For many
years, the self-described “neurodivergent crazy person” had been a boon to the
company.
As a
progressive with a doctorate in philosophy, Karp was unapologetic about
Palantir’s work, painting it as a way to ensure that Western governments could
defend themselves from terror and improve services for their citizenry. This
was unusual for Silicon Valley, where, in the words of former executive Julie
Bush, “most people did not want to support defence missions”, or even
“government writ large”.
Karp’s
stance helped attract a small group of fellow mavericks such as Sankar,
alongside many left-leaning liberals who bought into the mission. He always had
a sharp edge – Palantir, Karp often says, is “not for everyone” – but he helped
balance his fellow company founder, the hard-right libertarian Peter Thiel, and
calm customers who would otherwise have been squeamish about the company’s
links to the intelligence community.
Over
time, though, that balancing act began to wobble. Karp, current and former
colleagues say, evolved from being provocative but mainstream enough to sit on
the board of The Economist to being overtly political.
Several
insiders date the shift to 2023, the year Palantir’s long-dormant share price
took off, minting a cohort of executive billionaires, and the year that Hamas’
October 7 attack hardened Karp’s ideological convictions.
Palantir
took out a full-page New York Times ad backing Israel, and Karp moved a board
meeting to Tel Aviv in a show of solidarity. He began boasting that Palantir’s
tools were used to kill enemies, told Wall Street analysts who “tried to screw”
the company they deserved to be sprayed with “light fentanyl-laced urine”, and
declared the “truly progressive position” on immigration to be “extreme
scepticism”.
A former
Democrat who voted for Hillary Clinton, Karp donated $US1 million to Trump’s
MAGA Inc Super Pac after the 2024 election. After the administration sank boats
allegedly carrying drugs off the coast of Venezuela, killing those on board in
potentially illegal strikes, Karp defended the actions, saying that “if
fentanyl was killing 60,000 Yale grads ... we would be dropping a nuclear bomb
on whoever was sending it from South America”.
In turn,
Trump hailed Palantir’s “great warfighting capabilities and equipment” in a
post in April that included the group’s Nasdaq ticker.
Karp’s
MAGA-fication manifested itself in other ways. He hired a head of strategic
engagement called Eliano Younes, the mastermind behind the video that caused
the internal backlash and the curator of a popular feed that regularly taunts
Palantir’s critics.
To the
bafflement of many insiders, Younes remains close to the chief executive and
even speaks in meetings on Karp’s behalf, according to Palantir employees. (The
video clip depicts Karp choosing a “red pill”, a meme used to depict
progressives undergoing a political awakening.)
Even as
senior executives in the company urge their colleagues to refrain from
unnecessarily belligerent communications, Younes has doubled down.
When one
person on Reddit complained that the January video had “1984 vibes”, he
responded: “We don’t care.”
That
defiance set the stage for a far bigger confrontation in April, when the
company published a summary of Karp’s manifesto on its X feed. It laid out how
the “limits of soft power ... have been exposed” and argued for compulsory national
service.
The post
– which was pushed by a co-author of Karp’s book and came as a surprise even to
senior executives – triggered a revolt within the company and led to a revamp
of its communications policies.
‘Downside
investment risk’
Karp has
long taken political outspokenness “to another level”, says Argus Research
analyst Joseph Bonner, who maintains Palantir is a good long-term bet. But he
adds that the CEO now “runs the risks” of alienating customers.
“Governments
change,” Bonner warns. “The US government is a large percentage of Palantir’s
business, if something happens to that, that is a big problem for the company.”
Karp has
plenty of defenders. Ken Langone, the 90-year-old financier who was an early
backer of Palantir, says he was drawn to invest by Karp’s “commitment to
humanity” – and also notes his ability to get “people to do things they never
dreamed they could do”. The company would survive without Karp, Langone says,
but it would be “nowhere near as visionary”.
Another
investor told the FT that while there was “downside risk” to a chief executive
like Karp, his “bombast” has made an otherwise boring company “more attractive
to talent and customers”.
Even if
Karp is a liability, Palantir’s governance structure makes removing him
difficult. Its latest annual report – which contains some 40 pages of risk
factors, more than double that of beleaguered Boeing – argues that the
company’s growth depends on its unorthodox chief executive.
While
some executives defend Karp’s iconoclasm as the force that holds its “artist
colony” of engineers together, there is a movement afoot to push level-headed
media performers such as UK chief Louis Mosley forward for public appearances.
“The simplest way to calm things down,” one long-serving employee said, “is to
say less.”
The
battle against big AI
Palantir
has faced political adversity before. It had to sue the Pentagon even to be
taken seriously as a software vendor for the US government. Later, the Biden
administration took a dim view of the company when it came into office in 2021,
but officials were won over by a demo of Palantir’s platforms, especially those
involved in the delivery of healthcare.
“The only
thing that kept Palantir in the door was the product,” says Bush, the former
executive, referring to similar challenges over the decades. Palantir still
believes its technology will impress any administration, and that its software
is by now so deeply woven into the machinery of Western governments and
militaries that no successor could easily rip it out.
But the
political storm engulfing Palantir has broken just as the market, for the first
time in years, is questioning its technical prowess.
Michael
Burry, the investor made famous by The Big Short for his bet against the US
housing market ahead of the 2008 financial crisis, has claimed Anthropic (now
valued at almost $US1 trillion) is “eating Palantir’s lunch” and placed a large
bet against Palantir’s stock.
Karp has
been on the offensive. Clients will find “there are a myriad of problems that
these ... [AI] models solve, and there are even bigger problems that
they create”, he told
a company conference in June. Palantir’s technology, he posited, was the solution: “We’re in the business of giving you the
ability to solve those problems for yourself.”
He has
taken the fight to the leading AI groups. “Something has gone completely
wrong,” Karp told CNBC last week, suggesting that worries about cost and loss
of intellectual property were holding back other companies from using the big
AI groups’ frontier models.
But he
has also emphasised that “the whole secret of Palantir is the forward-deployed
model” of engineers. In the company’s own words, it faces “intense competition”
for talent, which could be made worse by “increased regulation of immigration
or work visas”.
Some
engineers, Karp has said, left over the group’s support for Israel, while more
departed in early 2025, unwilling to sign up for another Trump term.
Even
though employees can refuse to work on specific projects (vegans, for example,
have been excused from work with a poultry company), “what you’re seeing ... is a pretty large exodus of
long-tenured people”, says a
former forward-deployed engineer. The strain surfaced on a recent quarterly
earnings call, when Palantir admitted pulling people off its growing commercial
business to backfill government work.
Working
at Palantir “is death by a million paper cuts” says another recently departed
employee. “All of the people in your life are giving you an incredibly hard
time for working at Trump’s favourite software company and your LinkedIn is
full of [job offers from AI rivals] ... there are infinite AI dollars flying
around.”
A person
close to Palantir leadership said reports of a staff exodus were “not supported
by the facts, despite the fact that our talent is highly sought after”.
Joshua
Poore, vice-president at Harnham, which specialises in AI talent, says that
while Palantir remains “one of the sector’s biggest talent magnets”, it is
“losing a narrow, intense battle at the very top of the AI native pack” for the
best few dozen researchers – overwhelmingly to OpenAI and Anthropic.
Palantir
has spent millions of dollars on staff security, but the social costs of
working for the company have risen steeply – some employees have reported being
hounded out of neighbourhood groups and finding it hard to date in progressive
cities. Many senior executives have received death threats.
In
Silicon Valley, one employee quips, the most prized thing to be is a former
Palantirian: the pedigree without the stigma.
“By 2026,
if you are choosing to work at Palantir, you are making an active statement
about your own politics,” the person says. “They have become the place for
Republican tech bros to go work.”
The
number of talented engineers who share the views of the US president, or of
Karp, is “vanishingly small”, the former Palantir engineer says. The problem
for the company that built its fortune by selling foresight, the person adds,
is that it is “increasingly tied to a single administration, and a single man
at the top”.
Additional
reporting by Peter Andringa
Financial
Times
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