How Did One Small Defense Firm Get a Seat at Trump's Tech Summit?

When President-elect Donald Trump met with some of the top CEOs in tech last week, the smallest company at the table was Palantir, the data management company that sells primarily to defense, intelligence, and law enforcement customers.

It wasn’t CEO Alex Karp’s first presidential-level meeting; he was invited to the White House in 2014 for a discussion on technology and privacy. But Palantir’s $20 billion in annual revenue made it a small fish among the Apples and Googles at Trump Tower.

So why was it there? The answer was sitting to Trump’s left: Peter Thiel, billionaire entrepreneur, Palantir chairman, and now, advisor to a president-elect.

"It raises profound questions as to whether there has been the use of the transition to try to enhance the profile and value of Mr. Thiel's company,” Norman Eisen, a former U.S. ambassador to the Czech Republic who worked on White House ethics initiatives under Obama, told CNBC.

Among Palantir’s other fans are Trump’s National Security Advisor pick Michael Flynn, as well as  various members of the special operations forces community, the intelligence community, and even Five Eyes partners.  

But others are dubious. Eric Daimler, a Presidential Innovation Fellow and venture capitalist, conceded that the “depth and breadth of Palantir's reach within the government looks likely to expand” under Trump but argued that this isn’t a good thing.

“Palantir sells the government's own data back to it with good-looking visualizations and a sophisticated sales effort, Daimler said. “The government generates models with the data that Palantir sells back to it.”

Users can export their data in one of two XML formats but the form is very different. 

Instead, the Pentagon should hold on to that data, and continue to search for new tools, he said.

The Connection Maker

So what does Palantir do that other outfits can’t? It allows  users to create data visualizations that make it easier to spot patterns and connections among varied datasets. Say you’re looking for connections between a suspect in a robbery, arrest records, and people who entered a particular building.

“What Palantir can do,” company spokesman Courtney Bowman explained to me a few years ago, “is take those model outcomes or those hot-spot views, and, also, known information from criminal history records, from records management systems, from arrest records, and a multitude of other data sources that police legitimately have access to, and tie those all together into a picture of how the crimes, involving specific suspects or specific behavioral patterns, might play out.”

These visualizations can then be used to engage or persuade other stakeholders, Bowman said.  

“The privacy advocate will come back and say, ‘Well, show me when this [piece of personal information on a subject] is actually useful. Give me hard metrics of why it’s justifiable to hold on to this information.’ If we can use the platform to demonstrate cases where this is useful, we can start to bridge the gap between these two communities and explain why this is valuable information,” he said.

One Army intelligence analyst (who preferred not to be named as the analyst is actively deployed) made that point. The more data customers and users that Palantir acquires, the easier it becomes to remove barriers. “During my first deployment, I had a contractor who worked for Combined Special Operations Task Force-Afghanistan, [or CJSOTF-A.] When he came to my section, he still maintained his Palantir account for CJSOTF-A. I came to find that the server contains different information, including better photographs of named objectives as well as products produced specifically for [Special Operations Forces, or SOF.] But I don't think this is a case of Palantir withholding information; rather it has viewed conventional and SOF as two separate customers (the SOF community tends to be able to field cutting edge systems and equipment at a much faster rate, partly due to their small size and partly due to their far more flexible bureaucracy).”

Fast-forward to Trump’s summit. Google, Facebook, Apple and the rest are sitting on massive amounts of information. Palantir could help the law enforcement and intelligence communities mine it, then show that data to different groups to make different arguments. The larger the user base becomes, the more potential insights could occur.

“All we do is help an organization that already has data understand it. When they see what they can do with it, they gravitate to wanting to share it with each other,” one Palantir employee told Defense One.

The company recently won a lawsuit allowing it to compete to build the Army’s next Distributed Common Ground System, or DCGS. The current system is a kludge of different pieces of software, some commercial and some developed by the Defense Department. Some military heavyweights such as former Army Chief of Staff Gen. Ray Odierno claimed that Palantir can’t do all that DCGS can do.

The problem is that DCGS could never do what DCGS was supposed to be able to do, either. Some industry watchers say the obstacles to Palantir’s success aren’t competing products,  but people in government who are defending existing programs.

"I still think Palantir is the best suite of software available to the intelligence analyst/ officer. It's not perfect, but it sure as hell isn't as clunky, cumbersome and user unfriendly as DCGS-A. And they've done a great job with embedding Palantir mentors throughout Afghanistan (so has DCSGS-A, but I've already had two DCGS mentors who ended up only teaching Palantir)" said the Army analyst. 

“If you’re a failing program, your ability to hide is going to diminish ... if you think about what the president-elect is doing,” said industry lobbyist Jeff Green, “it seems like they want a strong defense but they don’t want to waste money. If you’re a program that delivers, everyone is fine. If you’re a program that doesn’t work well, you won’t have a place to hide.”

“There are many alternatives to Palantir technology, but few peers when combined with their sales effort into the government,” Daimler said. “If the defense and intelligence community is looking to smaller firms like Palantir to increase their footprint in matters of cyber security, we are well-served in evaluating on the strength of the technology and talent, not the proximity to any one administration.”