CIA as Main Client... 'The World's Most Secretive Company' Palantir [Hidden Industry Story]

US CIA, UK SIS and Other Intelligence Agencies Receive Data Analysis Services
Main Software 'Gotham' Tracks Osama Bin Laden's Funding Sources
Recognized for Usefulness by Private Giants like Airbus and BP
Founded by 'PayPal Mafia' Peter Thiel
"Competition Means Defeat... Must Create a Monopoly Market," Reflecting Thiel's Management Philosophy

Palantir, a US IT company logo. / Photo by Wikipedia capture

[Asia Economy Reporter Lim Juhyung] In the early morning of May 2011 in Pakistan, the U.S. military succeeded in killing Osama bin Laden, the leader of the international terrorist organization Al-Qaeda, through the CIA-led operation 'Neptune Spear.' Among the countless cells that made up Al-Qaeda, finding bin Laden was akin to finding a needle in a sand desert. At that time, the CIA was able to track bin Laden with the help of a company. That company is Palantir, known as 'the most secretive company in the world,' founded by Peter Thiel, one of Silicon Valley's first-generation investors.

◆An IT company for intelligence agencies, Palantir

Palantir is a U.S. IT company that produces software capable of analyzing vast amounts of data to predict terrorism and crime in advance. Its main products include 'Gotham,' a tool that can track terrorist organizations' funding sources through international currency transaction data, and 'Metropolis,' which analyzes financial crimes.

Since its main work involves tracking various high-intelligence crimes and terrorist organizations, Palantir primarily conducts business with intelligence agencies worldwide, such as the U.S. CIA and the UK's Secret Intelligence Service (SIS). Because most transaction details and customer information are kept strictly confidential, it has earned the nickname 'the most secretive company in the world.'

However, at the same time, Palantir is also a company that continuously receives love calls from U.S. investors. After listing on the New York Stock Exchange (NYSE) in September last year, it attracted attention when Cathie Wood, CEO of Ark Investment Management, made a significant bet on the company.

◆Business concept after 9/11 terror... Dreaming of a 'clairvoyant' that penetrates the data world

Palantir's founder is Peter Thiel, a well-known Silicon Valley entrepreneur. Thiel is also one of the so-called 'PayPal Mafia.'

Peter Thiel, founder of Palantir and a member of the so-called 'PayPal Mafia.' / Photo by Yonhap News

The PayPal Mafia refers to the founding members who made a fortune by selling the U.S. electronic payment company 'PayPal' to 'eBay' in 2002. They went on to establish various startups within Silicon Valley, becoming influential executives who shaped the U.S. IT industry. Alongside Thiel, the most representative member of the PayPal Mafia is Elon Musk, CEO of Tesla.

While Musk focuses on mobility innovations such as electric vehicles and autonomous driving through Tesla, Thiel is more interested in security-related topics.

The trigger for Thiel to decide to found Palantir was the 9/11 terror attack in 2001. According to his autobiography 'Peter Thiel,' he was deeply shocked by the events that unfolded in the U.S. after the terror attack.

On September 11, 2001 (local time), the Twin Towers in New York, USA, were engulfed in flames due to a plane terror attack. The 9/11 terror attack is said to have had a decisive impact on Peter Thiel's founding of Palantir. / Photo by Yonhap News

What concerned Thiel the most were the various regulations and laws passed for security purposes. In his autobiography, Thiel recalled, "On the very day the 9/11 terror attack occurred, the door to all kinds of harsh regulations was opened," and "So I could not just stand by and watch a second 9/11 or an even more terrible incident happen."

Thiel's answer to national security crises such as terrorism was data analysis. He believed that by accurately predicting future threats through data analysis, investigative and bureaucratic agencies affiliated with the state could respond to crises in a more legal and efficient manner. Based on this vision, Thiel founded Palantir in 2003 by pooling his own capital and investors' funds.

Palantir is named after the mystical tool "Palant?r" featured in J.R.R. Tolkien's famous fantasy novel The Lord of the Rings. The photo shows the Palant?r as seen in The Lord of the Rings movie. / Photo by YouTube capture

Palantir is named after the magical device 'Palant?r' from J.R.R. Tolkien's famous fantasy novel 'The Lord of the Rings.' In the story, the Palant?r possesses a mysterious ability to clearly see objects no matter how far away they are. Thiel hoped that intelligence agencies would wisely use Palantir's technology to easily identify threats from countries far from the U.S.

Palantir's software has proven its usefulness by closely cooperating with intelligence agencies from countries such as the U.S. and the U.K. In 2011, it significantly contributed to locating bin Laden, identified as the mastermind behind the 9/11 terror attacks.

Recently, Palantir's technology has been adopted beyond intelligence agencies by general companies. Palantir's civilian data analysis tool 'Foundry' has signed contracts with aircraft manufacturer Airbus and global oil giant BP. Foundry is reported to be effective in collecting aircraft operation-related data to improve process, quality control, and maintenance efficiency, as well as enhancing transparency in corporate management structures.

Palantir's civilian data analysis tool 'Foundry' has been recognized for its usefulness by major private companies such as Airbus and BP. / Photo by Palantir Official Website Capture

Last year, shaken by COVID-19, Palantir partnered with the U.S. Department of Health and Human Services (HHS) to develop the COVID-19 monitoring system 'Tiberius.' Tiberius is software that helps make useful decisions for quarantine by identifying the number of patients with underlying diseases, elderly people, and medical insurance subscribers to determine priority vaccine distribution areas.

◆"Competition is a guaranteed loss... To survive, monopolize," Thiel's success theory

Palantir, which has grown through contracts with national agencies prioritizing national security over commerciality and focusing less on the private market, has a character distinct from typical IT companies. However, this characteristic of Palantir is precisely the founder Thiel's management strategy.

In May 2016, Thiel explained his management philosophy during a lecture at Hamilton College in New York State. At that time, Thiel stated, "Competition is for losers," and "Instead, create a monopoly market."

According to Thiel, competition is what entrepreneurs do when they start companies with ideas that other companies can easily copy. In such situations, companies inevitably compete by cutting their profits to claim a limited pie, eventually being absorbed by other competitors or mutually destroying each other.

Instead, his success theory is that to truly prosper, one must build their own monopoly system. By pioneering small businesses that no one has started yet and firmly dominating the market, companies have a higher chance of survival. Like Palantir, which grew into a global big data company through the previously unattempted business of 'an IT company for intelligence agencies.'