Palantir Technologies: Gored by a Fact-Curious Bull?
September 2, 2019
A colleague forwarded me a link to “How CIA Backed Palantir Is Helping Police Root Out Thought Crimes.” Sexy title. It whispers to indexing spiders, “I am your friend. Index me, and we can kick back and talk about IPOs.” A couple of brief observations on this Sunday morning. Cue “Sunday Morning Coming Down.”
First, Palantir Technologies faces the same challenge other search-centric companies encounter: Generating sufficient payoff for investors. Not every investor is okay with losing a truck load of cash for tax purposes. The fix? An IPO. I am not sure that a single version of Palantir can pull this off. Therefore, it seems as if a company can be created to do Palantir’s “Let’s talk about what we do” work. Another company does the “it’s really secret” work.
Second, the CIA operates a venture fund, and that fund injects cash into a large number of companies. In that sense, Palantir Technologies is not unusual. The company was founded in 2003, and its technology is now behind the curve when compared to some of the newer investigative and intelware tools. Poke around Herzliya, and you will spot a number of “interesting” companies with much more zip zip implementations of the technology introduced decades ago by i2 Ltd. Yep, Palantir is what DarkCyber thinks of as a “me too” product, and that means more competition. Implications? See the preceding paragraph. Why does the CIA invest? Well, In-Q-Tel has not been delivering supported products which play particularly well with legacy systems or other tools in use. The investment helps make sure some basic compatibility and standard functions are implemented in a solution. Let’s not assume that meetings are the same as “telling a Silicon Valley whiz kid what to do.”
Third, the last DarkCyber heard was that the LA police department is indeed a customer. But the LAPD gets a bit of a discount and with budgets being budgets there is a possibility that LAPD will shift to another system. There are dozens of companies eager to provide Palantir type services within 30 minutes of Tyson’s Corner in Northern Virginia. But the problem with local police departments is that there are lots of them. But most of these outfits are strapped for cash, headcount, and cyber expertise. Selling more to outfits without much money to spend is not a recipe for success in DarkCyber’s opinion.
Fourth, the thought police angle is okay, but so far predictive analytics are useful up to a point. And that point is an unpredicted event, an outlier, or something that the 80 percent confidence analysis missed. Consider the performance of Predictive Policing and Palantir Gotham interaction in LA. There were problems because the data flowing into the system were like most data — not well groomed, house trained, and consistent. Therefore, neither PredPol nor Gotham turned cartwheels in joy when results were analyzed. Our DarkCyber video explored some of these issues in April 2019. Here’s a link to one in our LA Police Report series. Others can be located by searching this blog for DarkCyber PredPol.
Net net: Palantir Technologies is an important company. It faces challenges. How the firm figures out how to keep investors really happy, please stakeholders, and deal with the flow of better, faster, cheaper solutions from Israel and other countries are big problems.
Forget science fiction. Focus on the reality of the policeware and intelware markets.
Stephen E Arnold, September 2, 2019
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