Palantir, the super-secretive data firm, wants to be the operating system of the US government

Palantir, the secretive big-data company, has published its S-1 ahead of its initial public offering this year, and it offers plenty of insight into a firm that has its hands in industries ranging from automotive manufacturing to defense and intelligence.

Valued at $20 billion and headquartered in Colorado following a move from Silicon Valley over CEO Alex Karp’s dislike of the region’s “monoculture,” Palantir has courted controversy over the years for its work in predictive policing, which studies show can lead to increased policing of minority communities, as well as its affiliation with Immigration and Customs Enforcement.

Now in its S-1, the firm says it wants to become “the default operating system for data across the U.S. government.”

Work with the U.S. and allied governments

Palantir, which is named for an all-seeing orb from “The Lord of the Rings” universe, has been working with the U.S. government for years. The firm, which was founded in 2003, offers two software platforms: Gotham and Foundry.

Gotham, the company’s first offering, is used by defense and intelligence agencies in the U.S. and other Western liberal democracies and strategic allies. First released in 2008, the software was used in Afghanistan and Iraq to help soldiers map insurgent networks and locate roadside bombs using data ranging from information from confidential informants to intercepted communications sources.

In an interview with Axios on HBO, Karp said that the company’s software has been used in carrying out lethal attacks by clandestine services.

“I mean, our product is used, on occasion, to kill people,” he said, adding “If you’re looking for a terrorist in the world now, you’re probably using our government product, and you’re probably doing the operation that actually takes out the person in another product we built.”

Palantir doesn’t just work with military and intelligence services. The company says it now works with the Centers for Disease Control, the Department of Health and Human Services, the Department of Agriculture, the Department of Veterans Affairs, the Food and Drug Administration, the National Institutes of Health, and the Securities and Exchange Commission.

Palantir estimates its potential total addressable market (TAM) within the U.S. government stands at $26 billion. But since the company won a lawsuit against the U.S. Army related to how the military branch procures software, Palntir says its TAM could be even higher.

Criticism of government institutions

In its S-1, Palantir lays out why it says it’s needed by government institutions and portions of the commercial sector, saying that government entities are failing their goals.

“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,” Karp writes in his opening statement in the S-1.

“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.”

It’s Palantir, not the “engineering elite of Silicon Valley,” that Karp says has the ability and understanding to ensure those institutions and agencies can tackle the challenges of the modern world.

But working with government entities can be a struggle, the company says in its S-1.

“Selling to government agencies can be highly competitive, expensive, and time-consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale,” the firm says.

“We also must comply with laws and regulations relating to the formation, administration, and performance of contracts, which provide public sector customers rights, many of which are not typically found in commercial contracts.”

Palantir’s work isn’t focused solely on the national level, though. Its work funnels all the way down to state and local governments as well, which could provide the firm with plenty of additional partners in the future.

That said, the company says it recognizes that government budgetary constraints in the future may hurt its ability to access additional contracts.

There’s no denying the firm will continue to court controversy for its work, something it is clearly aware of, and could damage its reputation. It will be interesting to see how the market reacts to the stock when it goes public in the near future.

Got a tip? Email Daniel Howley at dhowley@yahoofinance.com over via encrypted mail at danielphowley@protonmail.com, and follow him on Twitter at @DanielHowley.

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