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Fred Dunkley

Fred Dunkley

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Fred Dunkley is a tech analyst, writer, and seasoned investor. Fred has years of experience covering global markets and geopolitics. 

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Peter Thiel’s Controversial Big Data Firm Could IPO At $41 Billion

Data

‘Lord of the Rings’ fanatics will not miss a beat here, but for the uninitiated, a Palantir is an all-seeing crystal ball that the evil wizard Saruman used to spy on his enemies.

Back to present-day reality, the U.S.-based data-mining firm of the same name—Palantir—the big analytics and artificial intelligence brainchild of investor Peter Thiel is said to be mulling its own power move by potentially filing for an IPO next year, or in early 2020.

As reported by the Wall Street Journal, Palantir has been discussing IPO plans with Credit Suisse and Morgan Stanley, and expects to turn a profit this year. It could even IPO with a value of up to $41 billion—more than double what private investors recently valued it at, and 55 times its 2018 revenue.

Again, for the uninitiated, the company has been working for the Pentagon and the CIA in Afghanistan and Iraq, and even U.S. Immigration and Customs Enforcement (ICE). And to say it’s controversial is an understatement.

A contract with ICE is enough to taint reputation in some circles these days, but Palantir has been controversial from the start because of its association with Thiel.

But the new Trump administration has been good to Palantir, even if its predecessors were not. In 2016, Palantir sued the U.S. Army over allegedly unfair bidding processes and won. Trump’s victory has led to a significant rise in Thiel influence in Washington, and in March this year, Palantir won an $876 million U.S. Army contract. Related: Did Chinese Stocks Just Get A New Lease On Life?

So, now it’s back in the IPO game, thanks to a political sea-change in Washington, and even if tech companies are under pressure to stop lending the government a hand, the fact that Palantir is even talking about an IPO and some are anticipating a $41-billion valuation suggests that it’s getting a pass.

But then again, Amazon’s Jeff Bezos—another increasingly influential personage in Washington--is taking a pass as well, even if some of his employees disagree.

In late June, nearly two dozens of Amazon shareholders asked company’s CEO Jeff Bezos to stop selling- little known to public- facial recognition technology called Rekognition to law enforcement agencies. Also in June, Microsoft was criticized after a blog post from January resurfaced, detailing its work with the Immigration and Customs Enforcement agency (ICE). A similar request came from 650 Salesforce employees. 

In May, thousands of Google employees protested over its work with the US military, in a project known as “Maven” and concerns that Google’s artificial intelligence could be used to improve drone strikes. The project helps the US government analyze drone footage using artificial intelligence.

Earlier this month, Bezos essentially said it was his duty to help the government. Amazon is favored to win a Pentagon contract worth as much as $10 billion. It’s a contract that would make it one of the biggest federal contractors in the country. The power it implies is immense. After all, it means moving the entirely of the Department of Defense’s (DoD) classified and unclassified data on to the cloud.

Related: America Has A Milk Problem

But Palantir is carrying around a bit more baggage that Amazon.

According to the whistleblower Christopher Wylie’s testimony, Palantir allegedly worked with Cambridge Analytica, which harvested data from Facebook users for political and geopolitical purposes. Even though the companies didn’t have contract, Palantir confirmed later that one of its staff had links to Cambridge Analytica.

As Bloomberg puts it, “Palantir knows everything about you” as it uses “War on Terror tools to track American citizens”.

The prospect of a big bang IPO, though, seems to be shoving criticism under the rug for investors, though. After all, this is about turning “data landfills into gold mines”—and where there’s money to be made, investors are more than willing to grab a piece of Saruman’s eye.

By Fred Dunkley for Safehaven.com

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