Palantir Technologies: On the Runway for a Trillion Dollar Take Off?
November 29, 2021
Palantir Technologies is an interesting company. Its technology is a combination of 2003 legacy innovations, some open source goodness, and 18 years of working hard to put a fence around policeware, intelware, financial fraud, and a handful of other markets. It sure seems to me that The Motley Fool, who is neither motley nor a fool, believes that this financial benchmark is a possibility; otherwise, why write the story? PR, stock churn, controversy, to catch the attention of observers and sideline sitters like myself? I don’t know, but with Apple putting the PR in PRivacy, who knows?
The premise is interesting. I noted this passage in the Motley and Fool write up called “Will Palantir Be a Trillion Dollar Stock by 2042“:
Palantir is valued at $41.3 billion, or 27 times this year’s sales.
Good but with unicorns being birthed with Malthusian energy, there may be some boundaries on Palantir’s ambitions. (I will mention a couple of them at the close of this blog post.)
The write up also states:
The company expects that growth to be driven by its new and expanded contracts with government agencies, as well as the growth of its Foundry platform for large commercial customers. The accelerating growth of its commercial business over the past year, which notably outpaced the growth of its government business last quarter, supports that thesis.
I noted this statement, which I find somewhat amusing:
The company has gained a firm foothold with the U.S. government, but it still faces competition from internally developed systems. Immigration and Customs Enforcement (ICE), for example, has been developing its own platform to replace Palantir’s Falcon. If other agencies follow ICE’s lead, the company’s dream of becoming the “default operating system for data across the U.S. government” could abruptly end.
I assume that Messrs. Motley and Fool know something about government procurement, why US and EU agencies license multiple systems, and stimulate internal innovation. Yep, I am thinking about DoD incubation centers and 18f. To Motley’s and Fool’s analysis, I tip my fake fur hat to the mention of Amazon as a competitor. Many don’t understand the scope of Amazon’s government services, and probably if told, still wouldn’t grasp the online bookstore as provider of streaming business data and slick AWS blockchain tools.
Let me share some of the hurdles that the galloping stallion has to clear after 18 years on the track:
- The NSO Group dust up has changed the table stakes for policeware and intelware outfits which seek to expand into commercial markets. The impact of NSO Group has been biting Israeli firms, but who knows what will happen tomorrow. The past is not a reliable predictor in today’s flash mob environment.
- The newer methods developed since Palantir opened for “business” are impressive. Many are more capable than Palantir because many tasks with which a trained Palantir forward deployed engineer must engage are point-and-click. Check out Datawalk, Sphinx 12, or a few of the Tel Aviv based outfits’ methods. (A ton of Voyager insider information has been dumped online courtesy of FOIA and the LAPD.)
- Crime is rising, but cyber crime in its multiferous manisfestations is sky rocketing. That means that the vendors pitching solutions could face buyer remorse. What will some of those who find that nifty smart software is not too much of a barrier to novel exploits engendered by the good enough software approaches of Google-Android type coding or Microsoft cloud-type engineering? Maybe some big time litigation?
Net net: From my perspective Palantir Technologies is an intelware and policeware outfit which has to deal with upstart competitors, tough to predict regulation and trade controls, and the looming shadow of buyer remorse which will fall across the cyber intelligence sector and hit vendors indiscriminately.
A trillion dollar outfit? Is there an NFT for Seeing Stones yet?
Stephen E Arnold, November 29, 2021
Who Remembers Palantir or Anduril? Maybe Peter Thiel?
November 4, 2021
Despite sci-fi stoked fears about artificial general intelligences (AGI) taking over the world, CNBC reports, “Palantir’s Peter Thiel Thinks People Should Be Concerned About Surveillance AI.” Theil, co-founder of Palantir and investor in drone-maker Anduril, is certainly in the position to know what he is talking about. The influential venture capitalist made the remarks at a recent event in Miami. Writer Sam Shead reports:
“Tech billionaire Peter Thiel believes that people should be more worried about ‘surveillance AI’ rather than artificial general intelligences, which are hypothetical AI systems with superhuman abilities. … Those that are worried about AGI aren’t actually ‘paying attention to the thing that really matters,’ Thiel said, adding that governments will use AI-powered facial recognition technology to control people. His comments come three years after Bloomberg reported that ‘Palantir knows everything about you.’ Thiel has also invested in facial recognition company Clearview AI and surveillance start-up Anduril. Palantir, which has a market value of $48 billion, has developed data trawling technology that intelligence agencies and governments use for surveillance and to spot suspicious patterns in public and private databases. Customers reportedly include the CIA, FBI, and the U.S. Army. AGI, depicted in a negative light in sci-fi movies such as ‘The Terminator’ and ‘Ex Machina,’ is being pursued by companies like DeepMind, which Thiel invested in before it was acquired by Google. Depending on who you ask, the timescale for reaching AGI ranges from a few years, to a few decades, to a few hundred years, to never.”
Yes, enthusiasm for AGI has waned as folks accept that success, if attainable at all, is a long way off. Meanwhile, Thiel is now very interested in crypto currencies. For the famously libertarian mogul, that technology helps pave the way for his vision of the future: a decentralized world. That is an interesting position for a friend of law enforcement.
Cynthia Murrell, November 4, 2021
Palantir: A Blinded Seeing Stone?
August 27, 2021
I try to keep pace with the innovations in intelware. That’s my term for specialized software designed to provide the actionable information required by intel professionals, law enforcement, and one or two attorneys who have moved past thumbtyping.
I am not sure if the article “FBI Palantir Glitch Allowed Unauthorized Access to Private Data” is on the money. The “real news” story asserted:
A computer glitch in a secretive software program used by the FBI allowed some unauthorized employees to access private data for more than a year, prosecutors revealed in a new court filing. The screw-up in the Palantir program — a software created by a sprawling data analytics company co-founded by billionaire Peter Thiel — was detailed in a letter by prosecutors in the Manhattan federal court case against accused hacker Virgil Griffith.
Please, read the source document. Also, my personal view is that such an access lapse is not good, but if the story is accurate, I am less concerned that other FBI officials may have had access to content in Gotham or whatever the system is branded these days is less problematic than oligarchs snooping or a Xi Jinping linked tong IT wonk poking around FBI only data.
My thoughts went in a different direction, and I want to capture them. Keep in mind, I don’t know if the access revelation is “true.” Nevertheless, here’s what I jotted down whilst sitting in a lecture about a smart bung for booze lovers:
- Was the access issue related to Microsoft Windows or to the AWS-type services on which some Palantir installations depend? Microsoft is another “here we go again” question, but the AWS question puts the Bezos bulldozer squarely in the security breach spotlight.
- How many days, weeks, or months was the access control out of bounds? An hour is one thing; the answer “We don’t have a clue” is another.
- If — note the if, please — the access issue is due to a Palantir specific feature or function, is there a current security audit of LE, military, and intel related installations of the “seeing stone” itself? If the answer is “yes”, why was this access issue missed? Who did the audit? Who vetted the auditor? If the answer is “no,” what are the consequences for the other software vendors and IT professionals in the “fault chain”?
The article points out that a royal “we” is troubled. That’s nice. But let’s focus on more pointed questions and deal with what might be a digital Humpty Dumpty. Just my opinion from the underground bunker in rural Kentucky.
Stephen E Arnold, August 27, 2021
Health And Human Services Continues Palantir Contract
August 23, 2021
The Us Department of Health and Human Services (HHS) renewed its contract with Palantir to continue using Tiberius. Fed Scoop shares the details about the renewal in the article, “HHS Renews, Expands Palantir’s Tiberius Contract To $31M.” Palantir designed Tiberius as a COVID-19 vaccine distribution platform. It has evolved beyond assisting HHS employees understand the vaccine supply chain to being the central information source for dosage programs.
HHS partnered with Palantir in mid-2020 under Trump’s administration. It was formerly known as Operation Warp Speed and now is called Countermeasure Acceleration Group. The renewed contract expands the Palantir’s deal from $17 million to $31 million. Palantir will continue upgrading Tiberius. Agencies will now use the platform to determine policy decision about additional doses, boosters, and international distribution.
When Palantir was first implemented it had not been designed to handle Federal Retail Pharmacy nor Long-Term Car Facility programs. These now provide more analysis gaps for vaccination gaps. Tiberius is also used for:
“Tiberius already has between 2,000 and 3,000 users including those at HHS, CDC, BARDA, the Countermeasure Acceleration Group, the Office of the Assistant Secretary for Preparedness and Response, the Federal Emergency Management Agency, the Pentagon, and other agencies involved in pandemic response. State and territory employees make up two-thirds of the user base, which also includes sub-state entities that receive vaccines like New York City and Chicago and commercial users including all retail pharmacies.”
Trump was supportive of Palantir; Biden’s team seems okay with the platform.
Whitney Grace, August 23, 2021
Silicon Valley Neologisms: The Palantir Edition
August 19, 2021
Do you remember the Zuckerland metaverse? (Yes, I know he borrowed the word, but when you are president of a digital country, does anyone dare challenge Zuck the First, Le Roi Numérique?)
Palantir Technologies (the Seeing Stone outfit with the warm up jacket fashion bug) introduced a tasty bit of jargon-market speak in its Q2 2021 earnings call:
Palantir’s meta-constellation software harnesses the power of growing satellite constellations, deploying AI into space to provide insights to decision-makers here on Earth. Our meta-constellation integrates with existing satellites, optimizing hundreds of orbital sensors and AI models and allowing users to ask time-sensitive questions across the entire planet. Important questions like, where are the indicators of wildfires or how are climate changes affecting crop productivity? And when and where are naval fleets conducting operations? Meta-constellation pushes Palantir’s Edge AI technology to a new frontier.
I think meta-constellation is a positive contribution to the American Silicon Valley-Denver lingo.
One of the interesting factoids in the write up is that the average customer “invests” lots of money in the firm’s software and services. The average customer yields $7.9 million. Let’s assume there was a touch of spreadsheet fever whipping the accountants. Chop that down to a couple of million, and the cowboy outfit is doing okay. Now the job is to corral those customers so there is sustainable, recurring revenue and generous profits going forward like little doggies heading to the meat processing facility.
Also, deploying the Palantirians’ system is as easy as cooking some of Cowboy Ken’s beans in an iron pot over a wood fire. The transcript faithfully reports:
In just two days, we were able to deploy an entire solution for this customer, leveraging our out-of-the-box functionality built in foundry, a time line previously unthinkable in the eyes of the customer. And frankly, it would have been unthinkable to us even three years ago, where an equivalent project might have taken three months. This is only possible because of our product. Innovations from software-defined data integration are driving the marginal cost of data integration to 0, archetypes and our no-code technologies that are driving the marginal cost of application development to zero.
Those data cowboys are moving faster than a branded calf on a crisp April morning.
The most interesting factoid is contained in this statement:
Given our strong cash flow position, we repaid our outstanding $200 million term loan facility and are currently debt-free. After paying off the debt, we ended the quarter with $2.3 billion in cash and cash equivalents.
I don’t want to raise a touchy subject, but this chart caught my attention:
That yellow line means that the company is losing money if I am interpreting the Google Finance graph correctly.
It may be helpful to consider that Palantir has never turned a profit. Let’s hope those Colorado transplants can covert expensive cows into hard cash after more than a decade grazing on the range. No digital cows, please. Leave those for the Facebook metaverse which is less than a meta-constellation in JRR Tolkien fantasy space.
Stephen E Arnold, August 19, 2021
Palantir Pushes Beyond What Any Other System Can Do It Seems
August 13, 2021
I believe everything I read online. Don’t you. I spotted this interesting article: “Palantir: Revolutionizing Big Data Analytics.” The write up shows a Covid dashboard and focuses on what’s called “data integration.” Putting information in an index or series of indexes so a user or software can run a query across that which has been placed in said indexes is sometimes called “federation”. Without entering a rabbit hole, let’s accept the “data integration” idea and ignore the buzzwords like “cross function collaborations.”
The Palantir system has a four step “process flow.” These steps include:
- Aggregating data
- Transforming data
- Securing data
- Empowering data.
I track with the first three steps, which have been required by policeware and intelware systems for decades.
The baffler is “empowering” data. I think this means that Palantir data are more valuable, potent, or muscular than data in a system for which I was a consultant many years ago. That was the i2 Analysts Notebook from the late 1990s.
That’s neither here nor there because Palantir did the Silicon Valley thing and found inspiration in that pioneering i2 system, which is now owned by IBM.
But here’s the statement in the write up that left me scratching my head:
Palantir is different from traditional business intelligence solutions like Tableau, Alteryx, or Cloudera, as it’s able to answer questions that a regular model isn’t able to. Questions such as “What steps should be taken if there’s another global pandemic”, or “How to increase margins in the most effective way”.
The companies cited in the passage are not intelware or policeware centric. Second, Palantir seems to be able to process natural language queries, extract on point facts and data from the aggregated and transformed data, and deliver answers.
As far as I know, NLP system do not reliably field ad hoc questions about general business issues or warfighting/intelligence issues. If systems did, there would not be the grousing about training, complexity, and disused intelware due to complexity and instability.
I don’t want to suggest that Palantir cannot deliver NLP which works. I would like to gently suggest that this just may not work in a way which would be useful in certain situations.
I understand the reasons “traditional” intelware fails. Managing data and logic together is tricky and made more challenging and expensive because real time streams can be ingested into some intelware systems. Specialists exist to deal with the real time challenge, and I am not sure Palantir has the robustness of Trendalyze, for example.
The data integrity issue is a big deal. Palantir makes it possible to know who input data. But the integrity issue is larger than than a single person. There are vendors who assemble data sets. Automated data sets work okay too, but when a stream is lost from an authorized intercept, the data set takes a hit. Plus, there is just bad data; for example, variable mechanisms for counting Covid deaths. Has Palantir whipped this garbage in problem? Maybe.
One weakness of Palantir’s competitors is described this way:
The inability to define key business metrics transparently in a common data foundation
This is an ambiguous statement. Most managers don’t know what they need or want. A case in point is a cyber security vendor offering phishing protection to clients. What happens if phishing techniques rely on auto generated emails with smart software crafting the pitch and the inclusion of valid links to the recipient’s company’s Web site. How is an employee to recognize these malformed email? We know phishing systems are not working because of the notable breaches in the US and elsewhere in the last six months of 2021. Senior managers want answers, and hopefully the answers are “good” or at least don’t lead to a diplomatic crisis or a severe business impact. Has Palantir cracked the problem of people who say, “I know what I want when I see it.” In my experience, quite a few CxOs rely on this method. Unfortunately this is not 1690 in Rhode Island where the vigilant are on the look out for irritated Native Americans. Recognizing that eye ball glimmering in a bush is not something intelware systems are able to do in a reliable, economical, speedy way.
Finally, the Palantir competitors “lack flexibility due to rigid data assets.” I remember the sales pitch of MarkLogic, a vendor of slicing-and-dicing content systems. The idea is that XML was almost magical. Input parameters and one gets output like a book made up of relevant content from the objects in the database. XML is a useful tool, but based on my experience with intelware systems, most of them use structured files, open source software, and the same popular algorithms taught in CompSci 401 around the world. The flexibility issue is a big one because now intelware must make sense of audio, video, pictures, gifs, database files, proprietary files from legacy systems, consumer file types like Word, and numeric streams. The phrase “rigid data assets” does quite capture the nuances of the data chaos facing most organizations.
Net net: This is an interesting write up, but I think it needs evidence, and substantive information. Palantir certainly has magnetism, but I still ask myself:
Why is Palantir funding SPACs and allegedly requiring these firms to agree to license the Palantir system?
This is a mystery to me. Because if Palantir whipped NLP, for instance, or the data chaos problem, the company would the hottest thing since i2 Analysts Notebook.
Stephen E Arnold, August 13, 2021
SPACtacular Palantir Tech Gets More Attention: This Is Good?
June 30, 2021
Palantir is working to expand its public-private partnership operations beyond security into the healthcare field. Some say the company has fallen short in its efforts to peddle security software to officials in Europe, so the data-rich field of government-managed healthcare is the next logical step. Apparently the pandemic gave Palantir the opening it was looking for, paving the way for a deal it made with the UK’s National Health Service to develop the NHS COVID-19 Data Store. Now however, CNBC reports, “Campaign Launches to Try to Force Palantir Out of Britain’s NHS.” Reporter Sam L. Shead states that more than 50 organizations, led by tech-justice nonprofit Foxglove, are protesting Palantir’s involvement. We learn:
“The Covid-19 Data Store project, which involves Palantir’s Foundry data management platform, began in March 2020 alongside other tech giants as the government tried to slow the spread of the virus across the U.K. It was sold as a short-term effort to predict how best to deploy resources to deal with the pandemic. The contract was quietly extended in December, when the NHS and Palantir signed a £23 million ($34 million) two-year deal that allows the company to continue its work until December 2022. The NHS was sued by political website openDemocracy in February over the contract extension. ‘December’s new, two-year contract reaches far beyond Covid: to Brexit, general business planning and much more,’ the group said. The NHS contract allows Palantir to help manage the data lake, which contains everybody’s health data for pandemic purposes. ‘The reality is, sad to say, all this whiz-bang data integration didn’t stop the United Kingdom having one of the worst death tolls in the Western world,’ said [Foxglove co-founder Cori] Crider. ‘This kind of techno solutionism is not necessarily the best way of making an NHS sustainable for the long haul.’”
Not surprisingly, privacy is the advocacy groups’ main concern. The very personal data used in the project is not being truly anonymized—instead it is being “pseudo-anonymized,” a reversible process where an alias is swapped out for identifying information. Both the NHS and Palantir assure citizens re-identification will only be performed if necessary, and that the company has no interest in the patient data itself. In fact, we are told, that data remains the property of NHS and Palantir can only do so much with it. Those protesting the project, though, understand that money can talk louder than corporate promises; many companies would offer much for the opportunity to monetize that data.
Cynthia Murrell, June 30, 2021
Palantir SPACtacular Pipeline Filler
June 14, 2021
I read “Palantir Gets Aggressive in SPAC Investments, Backing Digital Health, Aviation and Robot Companies.” The article explains that in a short period of time — about 12 weeks — the intelware company has “forged agreements to invest in at least six special purpose acquisition companies.”
Why?
The answer may be in this statement from the article:
Beyond the financial returns, Palantir is looking for innovative companies in big markets that can make use of its data tools.
Who says?
The write up answers this question too:
“We’re seeing an opportunity to back really good management teams with big visions,” said Kevin Kawasaki, Palantir’s head of business development. The company can partner and “allow them to have our data operating systems platform that we’ve put 15 years and billions of R&D dollars into,” he said.
It appears that Palantir is investing and then its “investment” is used to license its software.
If I am correct, this is an interesting way to generate revenues and obtain customer engagement. Let’s assume I am on the right track, my questions are:
- With the buzz generated by the initial public offering, have leads been converting into signed agreements at an improved rate?
- Is the Palantir system encountering the type of headwinds that other search and content processing companies have encountered; that is, long and complex set up, tuning, and customization process for impatient clients?
- Is the market for intelware facing competition from lower cost providers from other countries and US start ups which “appify” large, workstation like systems?
I, of course, don’t have answers to these questions. Worth watching how this SPACtacular pipeline filler delivers the sustainable revenue.
Stephen E Arnold, June 14, 2021
An Amusing Analysis of Palantir Technologies
June 7, 2021
I find analyses of intelware/policeware companies fascinating. “Palantir DD If You Want to Understand Company and Its History Better” is based on research conducted since November 2020. The write up asserts that Palantir is three “companies”: The government software (what I call intelware/policeware), the adding sales professionals facet of the business, and “their actual like full AI for weaponization and war and defense for the government.”
I must admit my research team has characterized Palantir Technologies in a different way. Palantir has been in business for more than a decade. The company has become publicly traded, and the stock as of June 2, 2021, is trading at about $25 per share. The challenge for companies like Palantir are the same old set of hurdles that other search and content processing firms have to get over without tripping and hitting the cinders with their snoot; namely:
- Generating sustainable and growing revenue streams from a somewhat narrow slide of commercial, financial, and government prospects. Newcomers like DataWalk offer comparable if not better technology at what may be more acceptable price points.
- Balancing the cost of “renting” cloud computer processing centers against the risk of those cloud vendors raising prices and possibly offering the same or substantially the same services at a lower price. Palantir relies on Amazon AWS, and that creates an interesting risk for Palantir’s senior management. To ameliorate the risk of AWS raising prices, buying a Palantir competitor, or just rolling out an Amazon version of the Palantir search and content processing system, Palantir signed a deal with IBM. This deal is for a different slice of the market, but it remains to be seen if this play will pay off in a substantial way.
- Figuring out how to expand the firm’s services’ business without getting into the business of creating customized versions of the Analyst’s Notebook type of product that Palantir offers. Furthermore, exceptional revenues can be generated from consulting, and to keep clients happy, Palantir may find that it has to resell competitors’ products. In short, consulting looks super from one point of view. From another it can derail the original Palantir business model. Money talks, particularly when the company has to payback its investors, invest in new technology, and spend money to generate leads and close.
- The clients have to be happy. Anecdotal evidence exists that some Palantir customers are not in thrill city. I am not going to identify the firms which have stubbed their toes on Palantir’s approach and the system’s value. Some online searching yields helpful insights.
- The company has a history of walking a fine line between appropriate and inappropriate behavior. The litigation (now sealed) between Palantir and the original i2 Ltd., the company which developed to a large part the current approach to intelware/policeware is usually unknown or just ignored. That’s not helpful. Combine the i2 matter with Palantir’s method of providing its software to analysts in some battle zones reveals helpful nuances about the firm’s methods.
To sum up, the analysis — at least to me — was a hoot.
Stephen E Arnold, June 7, 2021
Palantir: Pay Us in Bitcoin
May 19, 2021
I spotted an interesting article called “Palantir Technologies Accepts Bitcoin Payments, Might Hold on Balance Sheet.” Bitcoin is the poster child for digital currency. In some circles, Bitcoin evokes thoughts of money laundering and cyber crime. The write up points out in response to a question about crypto currency on the balance sheet:
Palantir’s CFO, David Glazer said, ‘The short answer is yes. We’re thinking about it and we’ve even discussed it internally. If you take a look at our balance sheet there’s $2.3 billion in cash at quarter-end including $151 million in cash flow in Q1. So it’s definitely on the table from a treasury perspective as well as other investments as we look across our business and beyond. Glazer went on to note that “in terms of accepting bitcoin from our customers, we do accept it as a form of payment. We’re open for business there.”
Some of the early investors in Palantir are enthused about digital currency. Business Insider reported that:
Block.one announced on Tuesday that it would launch a crypto exchange called Bullish. It’s landed over $10 billion in backing from Peter Thiel, Mike Novogratz, Louis Bacon, and Nomura. Novogratz said that Bullish’s scale and Block.one’s experience would make it “a formidable player.
Significant moves indeed. However, in the back of my mind is the thought that Bitcoin facilitates certain types of illegal activity. But that’s just my speculation.
Stephen E Arnold, May 19, 2021
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