Palantir, co-founded by Peter Thiel and Alex Karp, has seen substantial growth, especially from US government contracts. In the first quarter of this year, its US government revenue surged by 84% year-on-year to $687 million. Since 2008, the company has secured over $2.7 billion in defense contracts. This close alignment with US administrations, particularly strengthening under President Trump's second term, has been a key driver of its financial success.
The company's work with Immigration and Customs Enforcement (ICE) has drawn considerable controversy, with over $81 million in contracts since January 2025. Reports indicate ICE uses a Palantir tool to identify individuals for deportation, sparking criticism from rights groups. This willingness to undertake politically sensitive work, including taking over Project Maven (the Pentagon's AI targeting system) from Google in 2019, is seen by some as a calculated move to secure lucrative US government business, even if it means alienating European allies.
Despite the controversies and potentially losing out on European contracts due to its pro-America stance, Palantir's financial performance has been robust. Its market capitalization soared from $15 billion at the end of 2022 to $453 billion by the end of 2025, a nearly 30-fold increase. In 2025, the company reported $2.3 billion in adjusted EBITDA from $4.5 billion in sales. This exceptional market valuation, with a market cap 103 times its revenues and 205 times its operating profits, is partly attributed to a narrative that presents Palantir as an indispensable AI company riding a significant political wave.
Analysts suggest that Palantir's controversial positioning and outspoken rhetoric are not a hindrance but rather an integral part of its business strategy. This approach signals to the national security state that Palantir shares its worldview, helping to maintain its "national security moat" and secure highly profitable government contracts. While CEO Alex Karp maintains a bipartisan stance, his rhetoric often veers into libertarian and anti-government slogans, which can be off-putting to some clients, particularly in Europe, though it seems to reinforce trust within the US security apparatus.
The company's origins are rooted in post-9/11 efforts to improve data sharing, with early investment from the CIA's venture arm, In-Q-Tel, in 2005. Palantir's software, adapted from PayPal's fraud detection systems, sifts through vast datasets to identify threats. This historical context and its ongoing commitment to "defend the West" are central to its identity and business model, even as some foreign clients question its ultimate allegiance during difficult decisions.
