How Palantir And Its Data-Mining Empire Became So Controversial

How Palantir And Its Data-Mining Empire Became So Controversial

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Language: English

Type: Robot

Number of phrases: 372

Number of words: 2003

Number of symbols: 10012

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00:00
after 17 years on the private market data analytics company palantir is ready to make its public market debut co-founded by peter thiel back in 2003 its mission providing software that customers use to integrate volumes of data from images to spreadsheets into a central platform where it can then be securely analyzed and interpreted news of palantir's plans to go public as well as its recent announcement that it will be relocating its headquarters from palo alto to denver has put the secretive software company
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in the spotlight best known for its work with us government agencies like the cia the department of defense and most controversially immigration and customs enforcement the company was founded following 911 with the goal of defending american interests the core mission of our company always was to make the west especially america the strongest in the world for the sake of global peace and prosperity but in recent years palantir has also courted customers like airbus chrysler and bp commercial customers now make up about 50 percent of the company's revenue
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a number that's trended upwards over the past decade and even though palantir has never turned a profit revenue has been growing as losses have narrowed perfectly normal for a software company to show that sort of trajectory going into their ipo the question is does the economic model over time look like one that will eventually produce profits and you can certainly get there but while longtime investors are eager for the company to go public for others confusion remains about what it is exactly that palantir does and why their work with law enforcement
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agencies has raised eyebrows the name pound here comes from the lord of the rings in the fantasy series palantiri are spherical stones that help powerful users see what is going on in other parts of middle earth and communicate with each other founded in 2003 by billionaire peter thiel alongside current ceo alex carp joe lonsdale stephen cohen and nathan gettings palantirs tech helps detect unusual or suspicious patterns in large data sets using techniques that the founders
02:06
learned working together at paypal the cia was one of the company's earliest investors and its only customer for a number of years eventually other intelligence agencies like the fbi and the nsa jumped aboard using the company's customized data analytics capabilities to track and capture terrorists insurgents and drug smugglers they cite afghanistan and iraq as two examples of places where soldiers were mapping networks of insurgents and makers of roadside bombs by hand so they actually were bringing in technology to do things that
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intelligence agents on the ground were having to do manually in very dangerous places the company's software has been credited with helping to find and kill osama bin laden and though this has never been confirmed palantir certainly has not disputed it the text also helped to uncover bernie madoff's ponzi scheme and rooted out chinese spyware installed on the dalai lama's computer we work hand in hand with most of the special operators in the western world we work hand in hand with most of the clandestine services we're in over 40 countries
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today the company increasingly works with high profile commercial customers too its first was jpmorgan chase which adopted the software in 2009 to monitor employees who might go rogue however the partnership ended in scandal when jp morgan's special operations lead used it to spy on top executives others have continued to express interest though fiat chrysler now uses palantir to identify potential faults in car parts airbus uses it to respond more quickly to manufacturing problems accelerating the production of its a350 aircraft
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and bp uses it to analyze drilling data reportedly leading to a 10 increase in oil production in the north sea this is a hefty piece of software that runs across an enterprise and is used for understanding everything that a company faces whether it's their customers their supply chains downtime geographies where there's growth where their competitors are gaining share as revenue from the commercial sector has increased over the years ceo alex carp has had to rethink his historical dismissal of salespeople
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we don't look like a classic enterprise software company we have no sales people almost everyone is an engineer not anymore carp's been building out a sales team and in 2019 the company spent 61 percent of its revenue on sales and marketing however long-standing government contracts remain integral to the company's revenue as well as its reputation and during the coronavirus crisis palantir has formed a number of new partnerships too with the va the national institutes of health and britain's national health service helping these agencies as well as the cdc to track the spread of the virus and
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allocate resources in order to make decisions right now in order to know where the ppes need to go in order to know when and where you're going to reopen you want all the analytical models all the pieces of information all in one place pouncer is really designed to thrive in a crisis but especially under the trump administration the company's work with ice and police departments has raised considerable concern in the liberal leaning silicon valley leading palantir to double down on its commitment to law enforcement and national defense so i do think this idea of like nationalism and libertarianism is is kind of intersecting in a very
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interesting way and palantir seems to represent all of that protests against palantir first gained traction in 2018 primarily in response to the company's contracts with immigration and customs enforcement which are worth up to 92 million dollars the agency has crackdown on illegal immigration through workplace raids and separating families at the border my house has been protested for many months almost every day our office has been protested many palantirians protested against internally some people were so upset about it that they left these are very hard decisions
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co-founder and board member peter thiel is probably president trump's most famous silicon valley backer donating 1.25 million dollars to his 2016 campaign carp's politics differ but he says that palantir remains fully committed to aiding the u.s government i've never stopped being critical of this administration i'm not planning to vote for this administration so there are things i do differently the core issue though is who decides the small island in silicon valley that would love to decide what you eat how you eat and and monetize all your data should not decide who lives under your country
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and on what your conditions there are elections there are rules they should be enforced carp's ethos also holds true for palantir's work with police departments from new york city to los angeles new orleans and chicago who have used the tech for surveillance of criminal suspects and predictive policing a tactic that civil liberties groups say leads to over-policing of minority neighborhoods but can palantir really claim to be above the political fray i understand the desire to be neutral and to kind of say hey we're going to play by the by the rules that is a logically coherent stance if
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companies are also neutral with regard to who makes the laws but hold on if you're willing to back political factions with your own money you can't say well in this aspect of our business we do influence policy and politics but over here we are politically neutral it doesn't work that way other tech companies like google have backed out of controversial contracts with the defense department but palantir sees that as an abdication of responsibility peter and i built a very patriotic company google's clearly not a patriotic company carp also hit back against the culture of the valley and the company's s-1
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filing to go public here's what he had to say the engineering elite of silicon valley may know more than most about building software but they do not know more about how society should be organized or what justice requires our company was founded in silicon valley but we seem to share fewer and fewer of the technology sectors values and commitments in august the company announced it will move its headquarters to denver colorado likely both a financially and morally motivated decision the valley has basically sold the soul
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to an advertising model where it's okay to sell your data but it's not okay to support the country and they didn't want to be part of that ecosystem and didn't feel that that ecosystem was aligned with their values so what does all this controversy mean for investors for those who believe in palantir's mission it could be an asset and for those with qualms while it ultimately may not mean much the general belief around the valley is that public market investors in particular talk a big game about governance and about things that they view as acceptable and unacceptable
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and then they buy the stock anyway though palantir is yet to turn a profit this isn't of considerable concern to investors who are used to betting big on tech companies operating at a loss what will affect the company's value is whether investors view it more as a high growth tech company or a lower margin consulting firm that combination makes this a bit of a rubik's cube for investors because it's not a pureplace software model for most of its history palantir is spent heavily on software customization services for both government agencies and large corporations
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it is a very costly business to run but if they can automate their own processes and you know have a more efficient sales process and get the biggest customers to continue to buy more then their their operating metrics do improve over time as of late that's what palantir has been trying to do and now it offers two fixed feed platforms gotham for government clients and foundry for the private sector the company's target market is said to be the six thousand companies that make 500 million or more in revenue the average customer
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spends over five million dollars a year on palantir's product the top 20 customers account for roughly two-thirds of their revenue they say they only have about 125 customers so this is fundamentally different than your zoom and your slack it is not for everyone in 2015 when palantir raised its last funding round the company's valuation was upwards of 20 billion dollars but lately share prices have been all over the map indicating a valuation range of anywhere from less than 10 billion to over 20 billion they're trying to show investors that
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they do have this really big market opportunity that they have a bunch of potential customers out there and that's where the skepticism is the true value will be clarified at the end of september when volunteer completes its direct listing a process that is similar to an ipo except that the company won't sell any new shares it will just unleash those held by existing investors thus the shares will be priced based on investor demand and if the stock trades higher than expected that value won't be handed to brand new shareholders i think the palantir ipo is going to signal to
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venture investors and others that serving the department of defense and military business is going to be worthwhile carp certainly hopes so saying that the future of our nation depends on it the country with the most important ai most powerful ai will determine the rules that country should be either us or a western country palantir doesn't do business with china the us's main competitor when it comes to ai so if we bring our a-game we will win if we bring our d-plus game because most people in the valley live on an island where this seems like a questionable project
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they will win [Music] you

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