The Shadow Giant: How Palantir Quietly Became One of America’s Most Valuable Companies

On the morning of July 25, 2025, Wall Street’s digital ticker confirmed a fact that would have seemed surreal twenty years ago: Palantir Technologies is now one of the twenty most valuable companies in the United States. The software-and-secrets firm that once struggled to land a government contract now rubs shoulders with Apple, Microsoft, and Google, an unlikely king among the giants of Big Tech.

Yet if you stopped someone on the street and asked what Palantir actually does, odds are they’d hesitate. A few might mumble “spy stuff.” Some might mention Peter Thiel. Some might say they read about Palantir helping hunt down Osama bin Laden. A few protestors might spit the word: “Surveillance.”

The truth is all of this and more. Palantir is a story that spans the ruins of the Twin Towers, the hidden corridors of the Pentagon, Silicon Valley boardrooms, and the modern battlefield of data privacy. To understand Palantir’s unlikely ascent, you have to go back to a single big idea.

In 2003, while Silicon Valley celebrated the birth of Facebook, PayPal co-founder Peter Thiel had an idea that seemed darker, and far less likely to mint billionaires. Thiel, a libertarian who had just cashed out of PayPal, was obsessed with what the 9/11 attacks revealed about America’s blind spots.

The CIA, FBI, and NSA had all the puzzle pieces to spot the hijackers, but the data was scattered in silos or simply too vast for human analysts to connect in time.

What if, Thiel thought, there was a way to build a piece of software that could sift through oceans of data, link suspicious patterns, flag threats, and do it without trampling on civil liberties? He named it after the mystical “seeing stones” in The Lord of the Rings: Palantiri, crystal orbs that reveal hidden truths.

From the start, Thiel funded Palantir himself, then raised more capital from friends and loyalists. The company set up shop quietly in Palo Alto. Its early motto, whispered to insiders, was radical for a tech startup:

We will not sell ads. We will not sell data. We sell truth.

That sounded noble, but there was a problem: the U.S. government didn’t trust Silicon Valley’s libertarian coders to handle state secrets. The CIA had its own contractors. The FBI had its own analysts. Palantir’s founders knocked on doors and got polite rejections. They ran out of money more than once. Engineers took pay cuts. One employee mortgaged his house to make payroll.

Then came a breakthrough. In 2005, as Yasha Levine revealed in his book Surveillance Valley, the CIA’s venture arm, In-Q-Tel, gave Palantir its first real chance. The contract was small, but it let the company prove its core promise: that its Gotham platform could fuse disparate streams of data like bank transactions, airline logs, and phone records, into coherent, searchable networks.

That capability turned out to be crucial in two conflicts that shaped modern America’s counterterror landscape: Iraq and Afghanistan. By the late 2000s, U.S. Special Forces were using Palantir to track insurgent safe houses, and funding trails. Soldiers described it as a game changer, one Army officer famously said it did in minutes what used to take days.

By the time the Navy SEALs raided Osama bin Laden’s compound in 2011, the myth of Palantir as the Pentagon’s secret crystal ball was born.

After bin Laden’s death, the company rode a wave of fresh interest. Police departments in Los Angeles and New York came calling. Fortune 500 companies, haunted by leaks and thefts, wondered if Palantir could help them see inside their own operations. Wall Street banks used it to trace fraud. Health agencies used it to manage data during Ebola and, later, COVID-19.

At every turn, the promise was the same: give us your tangled data, and we’ll help you find what you don’t even know you’re missing.

But that promise made critics nervous. As Robert Reich wrote in his June article for the Guardian, civil liberties groups warned that Palantir’s tools made dragnet surveillance too easy. Investigations revealed that ICE used Palantir to help deport undocumented immigrants under the Trump administration, a fact that turned the company into a favorite target for activists.

When Palantir filed to go public in 2020, after seventeen years in the shadows, protesters gathered outside its Denver office chanting “No tech for ICE.” At the time, CEO Alex Karp dismissed the backlash. “We don’t build weapons,” he told Axios. “We build software that helps America survive.”

While it presented itself as a patriotic guardian, Palantir was, at its core, a money machine for big contracts. Unlike the typical software-as-a-service (SaaS) darling, it refused to be a plug-and-play app. A typical Palantir deployment came with armies of consultants and engineers embedded on-site, tweaking the tools for each client’s unique jungle of legacy systems and regulations.

For years, critics sneered that this wasn’t scalable. And for years, Palantir’s losses piled up. It lost hundreds of millions annually even as revenue climbed into the billions. But what once looked like a flaw turned out to be its moat. Any competitor who wanted to unseat Palantir would have to convince entire agencies, from the Department of Defense to the NHS, to rip out the custom infrastructure it had woven deep inside their operations.

As Palantir matured, it shifted gears. It began aggressively pitching its Foundry platform to the private sector: oil giants seeking efficiencies, auto makers trying to monitor supply chains, banks chasing risk signals across continents. The pitch: we’ve seen how the world’s messiest institutions work. We can handle yours.

COVID-19 supercharged Palantir’s reach. When governments scrambled for ways to track outbreaks and coordinate vaccine rollouts, they called Palantir. The UK’s NHS gave it massive pandemic contracts. The U.S. HHS used it to create a real-time COVID tracking dashboard. Critics worried about data privacy, Palantir insisted it never owned the data.

By 2021, Palantir was profitable for the first time. In the four years since, its stock has doubled and doubled again, lifted by a wave of demand for AI-enhanced analytics. It now counts more than 300 major government and Fortune 500 clients. As of July 25, 2025, its market cap sits north of $370 billion, ahead of Bank of America and Coca-Cola.

Where Google sells ads and Amazon sells everything, Palantir sells one thing: insight. Its engineers often describe the company as a “data operating system.” It crunches spreadsheets and model reality, like a chess player seeing every possible move before it happens.

This grandiose promise has turned Palantir into a lightning rod for debates about surveillance capitalism. Supporters say it’s the ultimate tool for fighting fraud and terror. Detractors say it gives too much power to governments and corporations to watch citizens and employees.

Peter Thiel himself relishes this tension. He once called Google “a near monopoly in search” but mocked the company for refusing Pentagon work on moral grounds. “We live in a world where one of the largest companies in the world refuses to work with the U.S. military,” Thiel said at a tech conference in 2018, “but happily works with the Chinese Communist Party.”

Palantir’s unapologetic stance, that its duty is to the West’s national security and its allies, still shapes its identity. Unlike other tech giants, it courts contracts in defense, intelligence, and critical infrastructure.

If you think Palantir is satisfied, think again. CEO Alex Karp has hinted that the next frontier is AI-infused decision-making. Palantir has invested heavily in building software that not only analyzes past data but simulates future outcomes, helping clients “wargame” everything from supply chain shocks to military campaigns.

A May 2025 leak showed that the company’s new Gotham AI suite is being trialed for battlefield command in drone warfare, an expansion that has civil liberties groups sounding new alarms about “algorithmic war.”

Karp, as usual, brushes off the critics. He insists the world is chaotic and dangerous, and someone needs to help free societies stay ahead of threats, foreign or domestic.

So, what is Palantir? A surveillance monster or a necessary shield? A tech company or an arm of the modern security state? A force for good or just another vendor cashing government checks?

It depends who you ask.

What’s undeniable is that in two decades, Peter Thiel’s secretive startup has turned from a backroom experiment to a cornerstone of America’s digital intelligence empire, embedded so deeply that prying it out may be impossible.

Someone who I know who has worked at the company once told me: “It’s like standing in front of an X-ray machine that can see your whole skeleton, and the skeleton of your entire organization.”

As the company cracks the top twenty most valuable U.S. firms, the rest of us are left with the unsettling question: who’s holding the X-ray, and who’s inside it?