The Corporate Law Group

The Palantir Letter

The S-1 Registration Statement filed by Palantir August 25th, 2020 includes an interesting letter from its CEO, Alexander Karp.  Karp says that, “The challenges that we face, and the crises that we have and will continue to confront, expose the systemic weaknesses of the institutions on which we depend.  Our industrial infrastructure and manufacturing supply chains were conceived of and constructed in a different century.  Government agencies have faltered in fulfilling their mandates and serving the public. Some institutions will struggle to survive. Others will collapse.”

This kind of CEO letter in an S-1 is unusual.  Even more unusual is social commentary in a securities disclosure.

Karp talks about Palantir’s culture:  “The culture of our company is more than a mere byproduct of the people we choose to hire.…At many organizations, employees spend their days, even their careers, posturing for others, concerned with claiming credit for success and avoiding blame for failure.”  Too true.

He addresses Palantir’s work for the surveillance state:  “The construction of software platforms that enable more effective surveillance by the state of its adversaries or that assist soldiers in executing attacks raises countless issues, involving the points of tension and tradeoffs between our collective security and individual privacy, the power of machines, and the types of lives we both want to and should lead.  The ethical challenges that arise are constant and unrelenting.”

Then he distances Palantir from Silicon Valley, criticizing its use of our private data, while defending Palantir’s work for the army:  “Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments.  From the start, we have repeatedly turned down opportunities to sell, collect, or mine data.  Other technology companies, including some of the largest in the world, have built their entire businesses on doing just that.”  Ouch, but true!  “Software projects with our nation’s defense and intelligence agencies, whose missions are to keep us safe, have become controversial, while companies built on advertising dollars are commonplace.  For many consumer internet companies, our thoughts and inclinations, behaviors and browsing habits, are the product for sale.  The slogans and marketing of many of the Valley’s largest technology firms attempt to obscure this simple fact.  The world’s largest consumer internet companies have never had greater access to the most intimate aspects of our lives.  And the advance of their technologies has outpaced the development of the forms of political control that are capable of governing their use.  The bargain between the public and the technology sector has for the most part been consensual, in that the value of the products and services available seemed to outweigh the invasions of privacy that enabled their rise….Our software is used to target terrorists and to keep soldiers safe. If we are going to ask someone to put themselves in harm’s way, we believe that we have a duty to give them what they need to do their job.”

He closes with:  “We have chosen sides, and we know that our partners value our commitment. We stand by them when it is convenient, and when it is not.  The ability of our most vital institutions to protect and provide for the public requires the right technology.  And we believe that as a result, over the long term, the strength and survival of democratic forms of government do as well.”

It’s refreshing to see a CEO speak candidly about their company and defend their company’s core business.