How Palantir Won Over Washington—and Pushed Its Stock Up 600%
The onetime Silicon Valley upstart has emerged as a power player in Trump’s second term—and adopted his persona
Palantir CEO’s prescient decisions to leverage geopolitical crises, technological trends and Washington connections have positioned the company as a power player.
Palantir reported record earnings and soaring U.S. government contracts but faces ethical concerns over its AI applications.
Palantir’s work with immigration enforcement and Saudi Arabia has sparked ethical concerns among employees and critics.
In early 2023, Palantir Chief Executive Alex Karp publicly announced the company had a new artificial-intelligence product that was “currently under development.”
Palantir engineers were stunned. They weren’t building any such product. But Karp recognized where the world was going and, as he had done before, he put Palantir Technologies PLTR 7.85%increase; green up pointing triangle in the white-hot center of the latest trend reshaping the global order. His engineers, he assumed, would figure out how to build it. They did.
The blind run into AI is one of a series of decisions by Palantir that have positioned the company today as a power player in the Trump administration, an integral tool for national security and the most expensive stock in the S&P 500. On Monday, it reported its best-ever earnings with more than $1 billion in revenue in the second quarter, 53% growth in earnings from U.S. government contracts and total booked contracts valued at $2.3 billion.
Its stock, already at a record and up more than 600% from a year ago, soared another 7.9% on Tuesday.
The company’s transformation from an awkward Silicon Valley upstart trying to make it as a government contractor has also emboldened it. Some of its recent and prospective deals toe the lines of what even some of the company’s current and former employees consider a violation of ethical applications of AI and moral uses of software by government—and Palantir is unapologetic.
As it has ascended, Palantir’s leadership has adopted a persona not unlike President Trump himself: taunting its critics, lambasting the media, and showing contempt for the departed employees who have sounded alarms about Palantir’s recent work. In particular, some former employees have said they viewed the company’s assistance on Trump’s aggressive immigration enforcement as potentially eroding the company’s own civil-liberties policies.
“We are sorry that our haters are disappointed, but there are many more quarters to be disappointed and we are working on that too,” Karp said Monday on a call with investors. He advised Palantir’s devoted base of individual investors to “stop talking to all the haters, they’re suffering.”
The company has taken a similar approach overseas, too, where it brings in about a quarter of its revenue. Last week, after Palantir received inquiries from German media outlets, the company put out a statement in German blasting journalists for “tendentious questions” based on ignorance.
Palantir builds data-management software that can centralize and analyze large and disparate data sets. Its platform can help soldiers determine the locations of enemy drones, sailors keep tabs on ship parts, immigration officials find unauthorized immigrants or health officials process and track drug approvals.
Since its founding in the aftermath of the 9/11 attacks by Karp and Peter Thiel—a crucial supporter of Trump’s first presidential campaign and longtime patron of Vice President JD Vance—the company has placed the government, and particularly the U.S. national-security apparatus, as its most important customer.
In keeping with that, it has followed the Trump administration’s lead, leaning hard into the president’s America-first agenda by providing software used in the deportation of immigrants, boosting manufacturing and shipbuilding, making a bid to build out the planned missile-defense shield called Golden Dome, and chasing AI deals in the Gulf states.
At an AI summit in Washington last month, Trump thanked tech leaders, including Palantir’s chief technology officer, Shyam Sankar. “We buy a lot of things from Palantir,” Trump said.
Palantir received more than $322 million from government contracts in the first six months of 2025, a 12% increase from the same period two years earlier. The government wins track the company’s steady progress from the same period in 2019, in Trump’s first term, when federal contracts accounted for just around $89 million.
It has won over the Army in particular, which Palantir once sued for unfair contracting practices. Sankar was commissioned in the U.S. Army Reserve in June, in another high-profile moment that burnished the company’s patriotic image. The Army re-upped Palantir’s work on the artificial-intelligence platform Maven Smart System, which bumped the value of the contract to potentially more than $1 billion; awarded the company a contract worth potentially $100 million to help Anduril Industries develop a new command-and-control center; and last week announced a $10 billion contract that represents a consolidation of existing software contracts.
The company has become so deeply embedded in the Defense Department that some current and former Pentagon officials said they worried about becoming overdependent on a single contractor for their data-processing needs, not unlike how the government has come to rely on Elon Musk’s SpaceX for most of its space-launch needs. There is a lot of money to go around—the Defense Department spent more than $58 billion on software in the last fiscal year.
Karp said on Monday that he expected the company’s U.S. earnings would grow 10-fold in the next five years—an astonishing prediction that bullish analysts say isn’t far-fetched. His prescient decisions to leverage geopolitical crises and Washington connections, and put his company in a position to respond to any crisis within 24 to 36 hours, have helped drive the company’s ascendance, according to people close to the company.
At the start of the Covid-19 pandemic, Palantir secured contracts to track the virus and vaccine production and distribution. After Russia invaded Ukraine, Karp personally traveled to Kyiv to meet with President Volodymyr Zelensky, which led to Palantir technology being integrated into more than half a dozen Ukrainian government and military agencies. In the days after the Oct. 7, 2023, Hamas-led attacks on Israel, Palantir leadership was on a plane to Israel. Karp, who is Jewish, later reveled in the pro-Palestinian protests he faced in the U.S. When Trump rolled out his mass deportation agenda, Palantir was there to help.
This spring, it secured its most controversial contract: a six-month pilot to build out an app that integrates data from across the government to assist with immigration enforcement. The company and Immigrations and Customs Enforcement will assess after the pilot whether to continue the work, which has rankled some current and former employees, who see it as an unwelcome extension of Palantir’s work helping the Department of Homeland Security combat crimes such as human trafficking that began under President Barack Obama. Thirteen former employees signed an open letter in May calling Palantir’s work with immigration enforcement “normalizing authoritarianism.”
Palantir said in a statement that it hasn’t backpedaled any of its policies, and only a tiny fraction of its more than 4,000 former employees have raised concerns.
Palantir leadership has said the company assesses the risks of every contract for potential violations of its principles on civil liberties and privacy. Palantir says its software logs how users access the data and tracks the origin and flow of all data, preventing fraud and abuse. Ultimately, though, the government decides how the data is used. Some of Palantir’s competitors have put more explicit limits on the use of their software, according to people familiar with the matter.
Breaking with the administration could put Palantir’s government contracts at risk, not unlike how Trump looked to slash SpaceX contracts after his falling out with Musk. At the same time, Palantir has expanded its influence within the Trump administration since January, with former senior employees and an adviser to Karp being tapped for top government positions.
Palantir’s former head of intelligence and investigations, Gregory Barbaccia, was appointed as the new federal chief information officer; and Jacob Helberg, a senior adviser to Karp, was tapped to serve in a senior role at the State Department. Clark Minor, another longtime former Palantir employee, was appointed the chief information officer of the Department of Health and Human Services. Minor, along with other Palantir employees, worked with the Department of Government Efficiency.
Karp said he supported former Vice President Kamala Harris in last year’s presidential election and has been a major Democratic donor, although he has increased donations to Republicans in recent years.
Palantir’s growing influence in Washington also comes in the form of lobbying dollars. Palantir has more than quadrupled its spending on federal lobbying since the first Trump administration. Last year, it spent a record $5.8 million on lobbying, according to federal disclosures, compared with $1.4 million in 2019, and is on track to spend even more this year.
Palantir is leveraging its prominence at home and its swaggering, battle-tested image from its involvement in the wars in Ukraine and the Middle East for a global expansion. It is working on what could be a string of lucrative contracts in Saudi Arabia, including using its software to help overhaul the country’s healthcare system and helping build out Neom, a futuristic city in the desert that has collided with practical and financial challenges. It already had a contract with Tonomus, a subsidiary of Neom.
The expansion into Saudi is a departure from the company’s stated focus on Western democratic values and freedom of speech and represents a change from around a decade ago, when Palantir exited from the country amid concerns about human-rights abuses by the prior regime, people familiar with the matter said. But it aligns neatly with Trump’s desire to develop the region as a business partner and hub for U.S. technology growth.
Divisive business moves aren’t new for Karp, who has long courted controversy as part of Palantir’s DNA and shrugged off the backlash even from his rank and file. “We are not everyone’s cup of tea,” he said in 2023. “You may not agree with that, and bless you. Don’t work here.”