PALANTIR: War, Surveillance, Artificial Intelligence

Part 5: Controversy and Regulation, The Shadow of the Surveillance State

Chapter 11. The Black Box of Power: Internal Culture and Governance

Attorney Kyungjin Kim

A. "Our Technology Sometimes Kills People"

(1) CEO Alex Karp's Statements and Company Culture

One afternoon in May 2020, CNN Business cameras were focused on Alex Karp. This CEO, who holds a doctorate in philosophy, sat deep in a chair wearing a worn sweater. When the reporter asked about the essential nature of Palantir's business, Karp paused for a moment. Then he delivered a single sentence: "Our products are sometimes used to kill people."

It was a statement no other Silicon Valley CEO would ever have made. Google executives say they "organize information." Facebook says it "connects the world." Amazon says it "serves customers." Technology companies know how to wrap their business in abstract, positive language. Karp broke that rule.

After the remark went public, Karp did not back down. He repeated it. In shareholder letters, investor meetings, and media interviews, he echoed the same message. "We make the enemies of the West afraid. Sometimes we eliminate them." In a 2024 New York Times interview, Karp went a step further. "The West is likely to fight on three fronts simultaneously against China, Russia, and Iran. To prepare for that war, we must develop autonomous weapons." A philosopher was talking about weapons.

This manner of speaking is no accident. It is strategy. He refuses to package Palantir as a "neutral technology platform." Instead, he declares, "We have chosen a side." That side is "Western democracy," "a free way of life," and "peace through strength." In a May 2025 earnings call, Karp said, "We are a warrior culture." Warrior culture. The message that word sends to the company's 4,000 employees is clear: you are not software engineers; you are soldiers on the front line.

This culture begins with the hiring process. Palantir operates a unique job category called "Forward Deployed Engineer." These individuals are not posted to air-conditioned offices in Palo Alto but are dispatched to client sites. It could be a military operations center, a police command post, or an intelligence agency's analysis room. There, engineers work alongside soldiers, analysts, and investigators. They write code while seeing with their own eyes what that code actually does.

Karp believes this experience transforms employees. In one interview, he mentioned personally visiting new engineers to talk about "philosophical responsibility." Not about coding techniques or business objectives, but about "the ethical implications of building tools used by governments." He asked: "Just because our software can do something, should it?" The question was posed, but the company's answer was already decided. It should.

Palantir's internal culture has a distinctive vocabulary. Employees call themselves "Palantirians." Those who leave the company become "veterans." Client demands are reinterpreted as "battlefield needs," and overtime becomes "mission execution." This language transforms work. Designing databases becomes "defending Western civilization." Optimizing algorithms becomes "tracking terrorists."

In November 2025, according to Anadolu Agency reporting, Karp confronted protesters at a Palantir demonstration site, telling them, "Our technology primarily kills terrorists." The word "primarily" was key. "Primarily" does not erase the remainder. The remainder stays in the shadows. Misjudgments, mistaken bombings, excessive enforcement, bad data, biased models. They are pushed into the statistical shadows.

Karp's worldview emerged from his academic background. He earned his doctorate at the University of Frankfurt under the supervision of Jürgen Habermas. His dissertation topic was the cultural origins of aggression. The idea that language shapes social structures and sometimes injects poison. This philosophy became Palantir's DNA. Data is not neutral. Technology is not neutral. Who uses it, how, and why determines everything.

But there is a gap in that logic. Karp says "technology is not neutral," while simultaneously saying "we only provide the tools and the final decisions are made by humans." The first sentence acknowledges responsibility. The second evades it. When both sentences come from the same person's mouth, the audience does not know which sentence to believe. Perhaps both are true. That is precisely the essence of the company called Palantir.

(2) The Coexistence of Cult-like Loyalty and Ethical Conflict

In the summer of 2019, something strange was happening at Palantir's Palo Alto headquarters. Letters were circulating among employees. There were two kinds. One letter criticized the company's contract with Immigration and Customs Enforcement (ICE). The other supported it. In the same hallway, next to the same coffee machine, employees signed different letters. According to Business Insider reporting, more than 200 employees conveyed their concerns to the CEO.

This incident exposed a rift inside Palantir. On the surface, the company appears perfectly united. "We have chosen a side." "We defend the West." "We are a warrior culture." These slogans hang on walls, echo in conference rooms, and are embedded in email signatures. But beneath them, some employees were quietly asking: "Are we really doing the right thing?"

The ICE contract was a particularly hot potato. During the Trump administration, ICE used Palantir's software to track undocumented immigrants and conduct family separation operations. Photos of wailing children appeared in the news. For some Palantir employees, those photos were not just news. They were the consequences of code they had written.

Karp's response was firm. He acknowledged family separation as "a really hard, complex, and shocking moral issue." But at the same time, he said he supported "a fair but rigorous immigration policy." And he presented a core argument: "Does a technology company have the right to censor the policies of an elected government?" His answer was clear. No. Supporting operations lawfully conducted by the government is a corporate duty.

This logic persuaded some employees. Others resigned. The Washington Post reported that departures increased during this period alongside internal disputes. Karp did not try to retain those who left. He opened the door for them. "If you don't like what our company does, leave." His message was blunt.

Through this process, Palantir was refined. Those who harbored ethical doubts left, and only those who agreed with the company's mission remained. The result was greater internal cohesion, but also greater homogeneity. The space for critical thinking narrowed. Karp himself once jokingly described Palantir's culture as "like a cult." It may not have been a joke.

Cults have several characteristics. There is a powerful leader. There is disconnection from the outside world. There is a shared narrative. Those who question that narrative are excluded. Palantir possesses all these characteristics to some degree. Karp is a charismatic leader. The company avoided media and public scrutiny for 17 years. The grand narrative of "defending Western democracy" binds all employees together.

In December 2025, at a DealBook event, Karp delivered another artful sentence: "We are a very ethical company. But don't believe it." The sentence is paradoxical. He claims to be ethical while telling you not to believe the claim. It appears humble, but in truth, it shifts the burden of verification to the audience. Saying "don't believe it" actually means "believe it." It is a rhetorical device that does not persuade critics but reinforces the solidarity of those who already believe.

When the Gaza war broke out in 2024, Palantir declared "full-throated support" for Israel. Karp called pro-Palestinian campus protests a "pagan religion" and "an infection within our society." These remarks would have made some employees uncomfortable. But within Palantir today, there is little space to express that discomfort.

In 2025, Time magazine named Karp one of the world's 100 most influential people. His net worth exceeded $18 billion. He meditates at a farmhouse in New Hampshire, practices tai chi, and goes cross-country skiing with bodyguards who are former Norwegian special forces members. He owns ten houses but jokes that they are "ten cross-country ski cabins." The philosopher became a billionaire, and the billionaire philosophizes about war.

Palantir's internal culture ultimately comes down to a single question: "Do you agree with this mission?" If you agree, you stay. If you disagree, you leave. There is no middle ground. This is how cult-like loyalty and ethical conflict coexist. The conflict does not disappear. It is simply pushed outside.

B. Governance Issues

(1) Class B/F Shares and the Three Founders' 80% Voting Control

On September 30, 2020, an unusual listing took place on the New York Stock Exchange. Palantir chose a direct listing instead of a traditional initial public offering (IPO). It was a method where existing shareholders directly placed their shares on the market without investment bank intermediation. Wall Street bankers missed out on fees, and Palantir saved tens of millions of dollars. But the truly unusual thing lay elsewhere.

When TechCrunch analyzed the S-1 filing leaked before the listing, editor Danny Crichton said: "Wow, this is a really complex ownership structure." Palantir created three classes of stock: Class A, Class B, and Class F.

Class A shares available to ordinary investors carry one vote per share. Class B shares held by insiders carry ten votes per share. Up to this point, it is a dual-class structure common in Silicon Valley. Facebook, Google, and Snap all use similar methods.

The problem is Class F. F stands for Founder. Peter Thiel, Alex Karp, and Stephen Cohen. A special class of stock created for these three people alone. Class F shares perform an astonishing bit of magic. Under certain conditions, the voting rights of these shares automatically adjust to constitute 49.999999% of total voting power. The reason for the precision to six decimal places is that exceeding 50% would classify them as "controlling shareholders," subjecting them to additional regulations. Palantir sits right at the regulatory boundary.

Consider what this structure means. Even if the three founders hold only 2% of the company's shares, they can still exercise nearly 50% of voting rights. Add the 10x voting power of their Class B holdings, and effective control can reach 70 to 80%. According to a 2025 AInvest analysis, the founders maintain 49.99% voting control, influencing major decisions from board elections to mergers and acquisitions.

In a typical company, when executives sell shares, they lose power. Not at Palantir. No matter how many shares a founder sells, the magic of Class F ensures management control is preserved. Economic stake and control are separated. TechCrunch's Crichton described this as a structure where "in the extreme case, founders could hold just 2-3% of the company's shares while controlling nearly 70% of the voting power."

Why did Palantir create such a structure? The official explanation goes like this: "To enable the founders to pursue the company's long-term vision without capitulating to short-term market pressures." Karp puts it more bluntly: "We need to be able to take on unpopular projects. We cannot be swayed by Wall Street's quarterly earnings pressure." Government contracts and defense software require long time horizons. Five years, ten years, sometimes twenty. The logic is that such long-term strategy must not be whipsawed by the demands of hedge fund managers obsessed with short-term stock prices.

There is another reason as well. Palantir handles the most sensitive data of U.S. intelligence agencies and the Department of Defense. A hostile state or force purchasing a stake and interfering with management could pose a national security risk. In this context, founder control functions as a kind of safety mechanism.

But critics see it differently. Richard Windsor, founder of Radio Free Mobile, gave this structure an "F grade." "Until the founders die, the remaining founders will have absolute control of this company, and no other shareholders will have any say whatsoever." He argued that at least a 30% discount should be applied to Palantir stock as a risk premium for terrible governance.

In practice, some institutional investors shy away from Palantir because of this structure. In its 2024 10-K report, Palantir itself included a warning to the effect that "governance may negatively influence institutional investors' purchase decisions." The company is aware of this fact. It chose this path anyway.

In 2022, shareholders even filed a lawsuit over these "magic shares." According to Law360 reporting, Palantir paid a settlement including $5.5 million in attorney fees and closed the case. But the governance structure itself remained unchanged.

The essence of the problem is this. A publicly listed company is, in principle, owned by its shareholders. Shareholders have the authority to elect, supervise, and if necessary, dismiss management. At Palantir, this principle does not function. No matter how many ordinary shareholders come together, they cannot overcome the voting rights of the three founders. It is formally a public company, but in substance, it is the founders' private kingdom. This is what "the black box of power" means.

(2) Excessive Stock-Based Compensation and Frequent Executive Selling

In February 2025, Bloomberg reported a shocking number. Palantir insiders had cashed out more than $4 billion in stock during 2024. CEO Alex Karp sold approximately $2 billion, and co-founder Peter Thiel sold one-third of his stake for $1.5 billion. And they did not stop in 2025. Karp announced an additional stock sale plan worth roughly $1 billion.

The numbers alone look simple. But what those numbers signify is complex.

Like a typical software company, Palantir compensates employees with stock rather than cash. This is called Stock-Based Compensation (SBC). It is a common practice at startups. When cash is tight, promising future wealth is necessary to attract talented people. "You earn less now, but if the company succeeds, you become wealthy too." This is the logic of stock options.

The problem is that Palantir is no longer a startup. Revenue in 2024 exceeded $2.9 billion. Market capitalization once surpassed $300 billion. Cash flow is healthy. Yet the scale of stock compensation remains enormous. According to the 2024 10-K filing, a significant portion of research and development (R&D) and selling, general, and administrative (SG&A) costs are composed of SBC. These costs dilute existing shareholders' stakes. Each time new shares are issued, each slice of the pie grows smaller.

What is even more contentious is the pattern of executive selling. According to Sherwood News reporting, searching FactSet data reveals virtually no record of Palantir insiders purchasing their own company's stock on the open market. Records of selling, on the other hand, overflow.

Over the course of 2024, Karp sold 40.7 million shares at an average price of $47.99. That is $2 billion. Co-founder Stephen Cohen sold 3 million shares for $152 million. CTO Shyam Sankar also cashed out more than $380 million. In February and March 2025, Karp executed an additional $45 million in sales, and Sankar sold $38 million more.

All of these sales were made through 10b5-1 plans. The 10b5-1 is a mechanism designed to avoid insider trading allegations. When executives set up a sale plan in advance, it executes automatically. Because the plan is established when executives do not possess material non-public information, it is legal.

But investors see a different scene. According to Fortune reporting, $1.4 billion of Karp's 2024 stock sales were concentrated in the weeks surrounding the presidential election. He sold when the stock price surged. Legal, but bitter from the perspective of ordinary investors.

Jefferies analyst Brent Thill pointed out in a March 2025 report: "Karp has sold 21% of his total Palantir stake." He added: "There are many reasons insiders sell stock. Tuition, buying a house, paying off debt, portfolio diversification. But there is only one reason insiders buy stock. They think the price will go up."

Palantir's governance structure makes this problem even more complex. In a typical company, when executives sell in large quantities, two things happen. First, the stock price drops. Second, executives' control weakens. At Palantir, the second does not happen. Thanks to the magic of Class F shares.

This is why investors feel uneasy. Executives cash out by selling shares while maintaining management control. The company's economic performance and executive control are decoupled. Imagine the worst-case scenario. Executives make a bad decision. The stock price crashes. Ordinary shareholders suffer losses. But executives have already sold at high prices and still control the company. This is a "structure that keeps the power but sells off the risk."

According to 2025 Forbes analysis, Karp's 2024 compensation reached $6.8 billion. Most of it was stock option gains from the rising share price. This scale ranks among the very top of U.S. corporate CEO compensation. Of course, this is the story when the company is doing well. Palantir's stock rose 340% in 2024. But in 2022, it had also crashed more than 70%.

A Motley Fool analyst summarized it this way: "Palantir is clearly a great company. But at the current valuation, it may be wise to follow management's lead and take some profits." Management is selling, so why are you holding? That is the question.

C. Diversity and Discrimination Controversies

(1) Asian-American Hiring Discrimination Lawsuit and $1.7 Million Settlement

On certain days in 2010 and 2011, interviews were being conducted at Palantir's Palo Alto office. They were hiring software engineers. Applicants demonstrated their coding abilities, presented their academic credentials, and explained their project experience. Then they went home and waited for the results. Many received rejection notices. What happened during the interviews is not on record. But who was hired and who was rejected was recorded.

In 2016, the Office of Federal Contract Compliance Programs (OFCCP) under the U.S. Department of Labor analyzed those records. And it filed a lawsuit. The allegation was that Palantir had systematically discriminated against Asian applicants.

The numbers tell the story. There were more than 1,160 qualified applicants for software engineer positions. About 85% of them were Asian. But the final hires were 14 non-Asians and 11 Asians. For QA engineer positions, the disparity was even more dramatic. Of more than 730 qualified applicants, about 77% were Asian, but of the 7 people hired, only 1 was Asian. In intern hiring too, Asian applicants were the majority, but non-Asians were hired four times more often than Asians.

The Labor Department statisticians did the math. What is the probability that these results occurred by chance? For the QA engineer hiring, the probability was 1 in 741. This meant statistically significant discrimination.

Asian applicants were "systematically eliminated" at the resume screening stage and the phone interview stage, the Labor Department alleged. Even though they had qualifications equal to or better than white applicants. The Labor Department also suspected that Palantir's internal referral system was designed to exclude Asians.

Palantir denied the charges vehemently. The company submitted a 15-page response. It pointed out that the Labor Department had analyzed only 3 of 44 positions. It countered that 36% of all hires during the same period were Asian, which was higher than the share of Asians in the external labor market. It also criticized the Labor Department's statistical analysis for "ignoring applicant qualifications and looking only at racial composition."

But the dispute did not last long. In April 2017, Palantir paid $1.7 million and settled. Specifically, the terms were $1,659,434 in back wages and stock option value, plus re-employment opportunities for eight victims.

Palantir did not admit wrongdoing. The company's statement read: "We disagree with the allegations made by the Department of Labor. We settled this matter, without any admission of liability, in order to focus on our business. We continue to stand behind our hiring record."

Why did they settle? The reason is simple. Palantir is heavily reliant on federal government contracts. Since 2010, government contracts alone had totaled more than $340 million. If they had lost the Labor Department suit, they could have lost their eligibility for federal contracts. The $1.7 million was a rational cost to avoid that risk.

This case conflicts with Palantir's brand. Palantir had positioned itself as an embodiment of "meritocracy." "We don't look at where you come from. We only look at ability." But the Labor Department's data told a different story. When ability was equal, race determined the outcome.

There is something even more ironic. Palantir is a data analytics company. Finding biases in the world through data is its business. Yet it failed to find bias in its own hiring data. Or rather, it chose not to find it. The problem came to light only when an external audit was conducted.

It was a period when all of Silicon Valley was being criticized for diversity issues. Google, Facebook, and Twitter all faced criticism for being "too white and male-centered." But Palantir's case was unusual. Asians form the largest technical talent pool in Silicon Valley. Indian, Chinese, and Korean engineers are present in large numbers. Yet Palantir actually excluded from this pool.

Why? Only speculation is possible. The vague criterion of "cultural fit" may have been at work. Palantir has a distinctive culture. "Defending Western democracy," "warrior culture," "choosing a side." When searching for people who fit this identity, one may unconsciously favor certain backgrounds.

Palantir did not abandon its "meritocracy" rhetoric after this incident. It intensified it. The "Meritocracy Fellowship" launched in 2025 is evidence of this. But the 2017 settlement remains on the record. A record of a company that preaches meritocracy but excluded people regardless of merit.

(2) The 'Meritocracy Fellowship' and the Meaning of Expanding Non-College Hiring

In April 2025, Palantir plastered posters across elite university campuses nationwide. "Instead of college. Instead of debt. Instead of brainwashing. Earn the Palantir degree." It was a provocative message. A few weeks later, the company officially announced the "Meritocracy Fellowship."

This program targets high school graduates or soon-to-be graduates. Only those not enrolled in college can apply. Fellows work at the New York office for four months, receiving a salary of $5,400 per month. Qualifications? SAT score of 1460 or above, or ACT score of 33 or above. These scores fall in the top 1 to 2 percent. The program demands Ivy League-level academic ability while telling applicants not to go to the Ivy League.

According to Fortune reporting, more than 500 applied and 22 were selected. An acceptance rate of 4.4%. Lower than Harvard's acceptance rate. Among those selected, some felt college was unappealing, while others had been rejected from their preferred schools. They spent the fall 2025 semester at Palantir.

Karp connected this program to his critique of education. He has long attacked the American university system. In the Q2 2025 earnings call, he said: "The opaque admissions criteria at many American universities have pushed out meritocracy and excellence." He called campuses "a hotbed of extremism and chaos." The remark targeted the 2024 pro-Palestinian protests.

The program's content differs from a typical internship. Fellows attend seminars on American history and "the foundations of the West." They hear lectures from historians, philosophers, scientists, and writers. There are communication classes as well. And they are deployed to actual projects with Palantir clients. After four months, they receive a "Palantir degree." Those who perform well are offered regular employment interviews.

Karp does not hide the program's intent. "When you come to Palantir, whether you went to which school or didn't go to any, it doesn't matter. The moment you become a Palantirian, nothing else matters. This is far and away the best credential in tech." There is irony in Karp, a Stanford Law graduate, saying college is unnecessary.

The Wall Street Journal described the program as an "anti-credential experiment." Korean outlet Chosun Biz also covered it with interest. On the surface, this represents an expansion of opportunity. It opens a new path for young people who cannot afford college. It saves four years of tuition and living expenses. They start working and building careers right away.

But critical perspectives exist as well. First, Palantir wants to secure talent early and educate them in its own way. College spends four years teaching critical thinking, diverse perspectives, and independent judgment. Palantir skips those four years and injects the company's values first. A young person exposed at age 18 to the narratives of "defending Western democracy" and "warrior culture" may find it difficult to question those narratives.

Second, the definition of "meritocracy" is problematic. Is an SAT score of 1460 the sole measure of ability? Getting that score requires good schools, good tutoring, and a good environment. Students from low-income families have a lower probability of achieving that score than those from wealthy families. While touting "meritocracy," the structure may actually favor a particular class.

Third, there is the connection to the 2017 Asian discrimination settlement. On one hand, they say "we only look at ability," while on the other, government investigation revealed discrimination. The Meritocracy Fellowship may serve as an image strategy to cover that blemish. Diluting the past record with the message "We're an open company that even hires high school graduates."

The "meritocracy" Karp espouses rejects diversity policies (DEI) based on race or gender. He advocates a "color-blind meritocracy." Looking purely at ability without regard to background. But critics point out that this approach ignores structural inequality. Applying the same standards to people with different starting lines produces unequal results.

Palantir's Meritocracy Fellowship has another dimension. Peter Thiel has operated the "Thiel Fellowship" since 2010. Each year, he gives $100,000 to 20 to 30 young people under 23 and has them drop out of college. Thiel has long called college a "bubble." Palantir's program is an extension of this philosophy. An anti-establishment streak shared by the founders is spreading throughout the company.

In November 2025, the first 22 fellows completed the program. How many received full-time offers was not disclosed. But Palantir has already begun recruiting the 2026 cohort. The program continues.

In the diversity debate, Palantir occupies a unique position. It rejects traditional DEI while emphasizing "diversity of thought." What matters is not racial or gender diversity, but diversity of perspectives and beliefs. But critics ask: in an organization where only those who agree with the "warrior culture" remain, does diversity of thought truly exist?

Palantir's diversity controversies always follow the same pattern. The company says "we hire on merit." Critics ask "does the word merit mask discrimination?" The 2017 settlement put that question into a legal document. The 2025 fellowship elevated that question into the language of the culture wars. Palantir does not avoid controversy. It uses controversy as fuel.