Why Did Palantir Technologies Move Its Headquarters From Silicon Valley to Denver?

On May 26 of this year, Alex Karp, the CEO of one of the world’s most powerful tech firms, hinted at perhaps the worst-kept secret in Silicon Valley:

Palantir Technologies, a controversial data-mining company with contracts throughout the highest levels of the federal government, would soon be moving its headquarters out of Palo Alto, California. As with most everything Palantir does, there was a twist. The company wouldn’t be shifting its operational base to New York City or Washington, D.C., where Palantir maintains offices and would have been in close proximity to some of its most prominent clients. “We haven’t picked a place yet,” Karp said in an interview that aired on HBO late that spring night. “If I had to guess, I would guess something like Colorado.”

Two days later, a manager from Denver’s Department of Economic Development & Opportunity (DEDO) pasted into an email a link to a news story that included Karp’s quote about Palantir’s possible move. Like many within the city’s government, the staffer seemed unfamiliar with Palantir, which has around 2,400 employees worldwide, a valuation estimated near $20 billion, and a mounting list of critics who have questioned the company’s work with the CIA, U.S. Immigration and Customs Enforcement (ICE), and municipal law enforcement agencies. “This company has been talking about relocation for a while,” Rebecca Gillis, DEDO’s business retention and expansion program manager, wrote to employees of the Colorado Office of Economic Development and International Trade (OEDIT), the state agency that most likely would be involved in such a move. “[W]ondering if you can share if they have interacted with OEDIT recently. If not, should we reach out? I may do so on behalf of the city….”

For Colorado, there was reason to act quickly. A Silicon Valley unicorn pulling up anchor in Northern California and seeking refuge at the edge of the Rocky Mountains doesn’t happen every day, especially in the middle of a pandemic. In fact, the news couldn’t have come at a better time. As shutdowns mounted nationwide, there appeared to be little immediate economic relief on the horizon; under those circumstances, Palantir’s announcement must have seemed like an unanticipated gift left on Colorado’s doorstep. The company’s move, if it happened, would be an affirmation—a signal to the rest of the nation that Colorado wasn’t just back in business. With another tech company setting up an office in Denver, the state could become a magnet for Silicon Valley firms and other prestigious businesses during the worst economic climate in nearly a century.

The name Palantir comes from the seeing stones in J.R.R. Tolkien’s The Lord of the Rings saga, and the firm’s software analyzes, or “sees,” massive data sets across industries such as finance, transportation, health care, law enforcement, and defense. With two primary programs—named Gotham and Foundry—the company’s tech was forged in the shadow of the 9/11 terrorist attacks, when strategic failures underscored the importance of data integration on a mass scale. “We built our company to support the West,” Karp, a billionaire Stanford Law School graduate with a doctorate in neoclassical social theory from Germany’s Goethe University, told the New York Times Magazine earlier this year.

Palantir’s software is viewed as a powerful tool that’s prized for its user-friendliness and its ability to merge and quickly process vast amounts of data that can help organizations identify patterns, trends, and connective tissue that might otherwise elude ordinary human analysis. The company has at least 125 clients and recently signed a contract to help the U.S. government track the manufacturing, distribution, and administration of future COVID-19 vaccines. Even as Palantir earned $345.5 million in federal contracts in 2019, the company did not turn a profit; in fact, it hasn’t been profitable in its 17 years of existence.

While Palantir officials like talking about their good works—for example, helping Marines in Afghanistan detect roadside bombs, undermining bank fraudsters, or assisting law enforcement in uncovering human trafficking operations—the company’s name these days is synonymous with the nefarious ways in which big data can invade, and even destroy, lives. Among its most recent controversies, Palantir’s tech has been used to power immigration crackdowns across the country. With the help of Palantir, ICE this past year descended on Mississippi chicken-processing plants and arrested nearly 700 undocumented workers, marking one of the largest workplace immigration raids in American history. A 2017 ICE document on an impending “Unaccompanied Alien Children Human Smuggling Disruption Initiative” implicated Palantir’s Investigative Case Management software in targeting parents and relatives of unaccompanied minors crossing the border. That same year, Palantir software assisted immigration dragnets across the nation.

Palantir has also been accused of farming Facebook information used by Donald Trump’s 2016 election campaign. A Palantir employee once helped create an online personality quiz to mine personal data that included information about the test-takers’ Facebook friends (the employee was fired). Over the years, police in New York City and New Orleans have ended their work with Palantir, in the latter case over citizen concerns about how data was being used. Additionally, a University of Texas at Austin professor has raised questions about Palantir’s longtime relationship with the Los Angeles Police Department, in part over data analysis that could lead to racial profiling.

Several Palantir employees left the company after the ICE revelations, and following the departures, Karp—who is also one of the company’s co-founders—began to rail against what he called Silicon Valley’s progressive “monoculture.” He sarcastically called Google employees “super-woke engineers” after the company withdrew in 2018 from Project Maven, the Pentagon’s artificial intelligence operation, following criticism from some employees who didn’t want to be involved in the development of potentially deadly technology.

Soon thereafter, Karp was agitating for Palantir’s exit from California. “The engineering elite of Silicon Valley may know more than most about building software. But they do not know more about how society should be organized or what justice requires,” the company said earlier this year in its paperwork in anticipation of taking the firm public this past September. “Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments.”

Even with all of that as a backdrop, Colorado seemed eager to lure the powerful tech company. “I spoke with a [Palantir] rep this morning and they have asked us to prepare a market overview proposal,” Michelle Hadwiger, OEDIT’s deputy director, wrote in an email on May 28, which 5280 obtained through an open records request. “Colorado would likely just be competing w CA…. Governor will call this week and I will let everyone know what I find out.”

On June 3, OEDIT shipped off a 31-page proposal to Palantir. In what could be seen as a nod to Karp’s complaints about Silicon Valley, the plan listed Colorado as a “purple” state, with “conservatives and liberals sharing views and finding common paths forward,” and played up the state’s educated residents, its world-class international airport, its colleges and universities, and Denver’s proximity to federal entities that include military bases and research laboratories. To ease tax-related concerns, the proposal suggested the state’s Taxpayer Bill of Rights “engendered a stable and predictable tax environment for businesses.” The pandemic wasn’t an issue, either. Once COVID-19 was under control, the state assured Palantir, “Colorado businesses and workers will again lead the nation.”

Attached to the proposal was a four-paragraph letter to Karp signed by Governor Jared Polis. Even as Palantir’s workforce was in turmoil, the news cycle was registering negative stories about the company’s work, and ICE raids were being planned across the country, Polis assured Karp that “Colorado shares and embodies Palantir’s vision of promoting national security and economic development through innovation,” adding that “Palantir’s national security primacy would be further cemented by becoming a lead industrial anchor in a forward-looking state that is primed to serve as an international leader in the economy of the future.”

“A spirit of support, bold progress, and collaboration permeates all we do here, and my team is standing by to assist you with anything you might need,” the governor continued, according to a copy of the letter obtained by 5280. “There is a friendly set of local and state communities waiting to welcome Palantir to Colorado.”

In mid-August, a Palantir attorney let Polis’ office know that the company would locate its headquarters at 1555 Blake Street, in the SugarCube Building, where Palantir had quietly maintained a small staff for the past two years. The attorney then contacted OEDIT, which in turn called the city’s economic development office. An address change—from Palo Alto to Denver—was made on the company’s website. With a few keystrokes and zero fanfare, Palantir now belonged to Denver.

A day or two later, the phone began to ring at the office of Denver City Councilwoman Candi CdeBaca. The voices on the calls were panicked. Did CdeBaca know that one of the nation’s most secretive companies had just relocated its headquarters into her district? “It was like, Oh, shit,” CdeBaca remembers.

Among those phoning the councilwoman were immigration activists who’d participated in rallies outside ICE’s Aurora Contract Detention Facility, where many of the region’s undocumented immigrants are kept as they await hearings. The callers were familiar with Palantir’s reputation and the ways its technology had been used in support of raids over the years. They also noted how Palantir co-founder and chairman Peter Thiel—a libertarian and Trump supporter—donated $1.25 million to the 2016 campaign and was a speaker at that year’s Republican National Convention.

Until late August, CdeBaca admits, she’d never heard of the company. “These people were asking me, ‘Do you know what Palantir does? Do you know what is being done to address this?’ ” CdeBaca says. She Googled “Palantir,” and what she found made her furious. “A company like this, and the governor and the mayor don’t say a thing about it?” the councilwoman says. “I had no heads-up from anyone that this was coming.”

Within the first few weeks after Palantir’s relocation, local politicians began pressing the city and state for more information. Who contacted whom? How many Palantir workers would relocate to Denver? How many Coloradans would the company hire? Had Palantir said anything about working with Denver police? Would the company’s headquarters remain in its Blake Street office—which was miniscule compared to Palantir’s Palo Alto presence—or was it looking for property elsewhere in the city? Did Polis and Mayor Michael Hancock have an opinion about Palantir and its work?

“All anyone keeps hearing is that Palantir didn’t get any tax incentives to move, as if that absolves them of everything else,” says state Senator Julie Gonzales, whose district also includes Palantir’s new headquarters. “We’ve got a company that’s been the steroid injected into the ICE surveillance infrastructure, in a city where people have actively fought for immigrant rights, and we can’t get answers on some very basic questions. I’m mystified.”

Polis’ spokesman referred questions about Palantir to OEDIT, which declined to make available any of its officials for interviews. In a statement to 5280, former U.S. Representative Betsy Markey—a member of Polis’ cabinet who serves as OEDIT’s executive director—wrote: “Colorado’s world-class talent, quality of life, and collaborative environment continue to be major drivers of business relocation and expansion. Palantir’s decision to relocate their global headquarters to Colorado underscores these core strengths.”

In another statement, Polis’ spokesman wrote that “Colorado is quickly becoming a destination for technology companies because it is an amazing place to live, work, and play and we’re proud that companies are noticing Colorado’s excellence. When a…company like Palantir moves to our state without any state incentives, it says a lot about the attractiveness of our state and much more about our highly educated, highly motivated workforce chock-full of innovators.”

Hancock’s spokeswoman did not make the mayor available for an interview and referred 5280’s questions to Eric Hiraga, the executive director of DEDO, who spoke with a Palantir attorney on September 14—nearly three weeks after the move was made public. Hiraga says Palantir’s relocation already had led to “a pipeline of prospects” from Silicon Valley, though he admits he “didn’t know much” about the company before its move. During his 15-minute call with Palantir—Hancock’s chief of staff was also on the line—Hiraga says the company didn’t shed light on its work or its growth strategy within Denver. “They were holding things close to the vest, in anticipation of going public,” Hiraga says of Palantir’s Nasdaq stock exchange listing, which went live on September 30. Despite the lack of information, Hiraga says DEDO is open to finding ways to assist Palantir, including helping the company find prospective employees and directing it to potential philanthropic efforts in the city.

Hiraga says he’s looked at job-recruiting websites and noticed that the company was offering employment opportunities at its new headquarters. “Palantir has had impressive growth as a tech company,” Hiraga says. “We have other publicly traded firms in our portfolio, and they add to the attractiveness of the city, and they further our tech ecosystem. There will be time to build our relationship as [Palantir] develops plans.”

In his interview with 5280, Hiraga was joined by other DEDO officials, including the department’s spokeswoman, Leesly Leon. Asked whether Denver’s cultural values aligned with Palantir’s vision, Leon said, “We don’t know much about Palantir yet, and we need to know more from them.” She added, “We look forward, once they get settled, to get to know more about what they do, their operations, and how they plan to engage with our community.”

Though Polis, Hancock, and officials from both OEDIT and DEDO had myriad opportunities to quiz Palantir officials about the company’s future plans, emails obtained by 5280 through open records requests don’t indicate they did. One message in August—sent the day the relocation was announced—includes a rundown of Palantir facts, distributed among members of city staff, that gives a breezy mention of the company’s work with ICE and a note that Thiel was a Trump backer “although recently [he] said he may pull back his support.” Perhaps the most critical comment among dozens of emails is from a DEDO staffer who calls Karp a “character.”

According to a Polis spokesman, the governor has talked once to Karp, on a brief phone call that occurred after Palantir settled on its Denver relocation. Email records show that a Palantir attorney tried to set up a virtual meeting between Karp and Hancock, but the mayor ultimately did not participate.

The decision to welcome Palantir, while also seemingly keeping the messier parts of the company’s work at arm’s length, has dismayed civil rights attorneys. With Polis, who made his fortune through tech-based businesses, “you’ve got a governor with a Silicon Valley attachment,” says Arash Jahanian, director of policy and civil rights litigation at Meyer Law Office. “It might be that all he’s thinking about is how great it is to get a Silicon Valley company here. I would have hoped our state and local leaders wouldn’t so blindly welcome a company like this without hesitation—or at least that they’d mention how unfortunate it is, the business they conduct—but it’s clear that officials looked at this only for the bottom line, that it was good for the economic possibilities in Colorado.”

Seth Levine, a Boulder-based venture capitalist who co-founded the tech investment firm Foundry Group, says Palantir’s relocation could be viewed as a boon for the state, but really it’s just a “continuation of the dynamism in the local tech economy” that has seen giants like Facebook, Twitter, Google, and Amazon open offices in Colorado. “This doesn’t change the game for Denver,” he says, “but it is a signal to other tech businesses, in the time of COVID, that this is a great place.”

But if Karp moved to Colorado to escape California’s political climate, Levine says, “I think he’s misjudged the nature of the Colorado workforce. I hope this isn’t a political play, because companies should evaluate their region to operate based on availability of talent, their ability to successfully run their businesses. If Palantir moved here because they feel like their current issues won’t matter in Colorado, that’s not true. If they don’t think this is a progressive community, I absolutely believe they’ve made a mistake.”

“Denver felt like a Palantir sort of place,” says Sam Rascoff, a longtime adviser to Palantir who is helping coordinate the company’s expansion to Denver and is a friend of Karp’s. “There’s a diversity of perspective and viewpoints on issues, and that’s important to us because we work in areas where complexity is the rule. Colorado feels like a place where complex issues can be addressed as such, and not broken down into a simple formula. For Palantir, it checked a lot of boxes.”

As the state detailed in its proposal to Palantir, Denver has multiple other tech firms, nearby government offices, and universities from which to draw future employees. It also didn’t hurt that the governor had built his wealth by creating an early internet access provider and later founded online floral and greeting card companies. “Colorado’s hospitable to tech entrepreneurship,” Rascoff says. “One good way to gauge that is whether the governor of your state is a tech entrepreneur himself who has a feel for this area. If so, you probably have essentially proven the point.”

Palantir has added engineers and senior managers to its Denver operation since it officially moved its headquarters. In a few months, Rascoff says, Palantir doubled its Denver workforce, which initially numbered in the “tens.” COVID-19 will determine other moves, but Rascoff expects there will be “substantial growth” in the Denver office within the next year. If that happens, Rascoff says, the company likely would look for a larger office, perhaps elsewhere in the city.

Though Rascoff says working with state government or private entities “wasn’t part of the rationale” in Palantir’s move, the company pitched Colorado officials this spring on a project that would collect “diverse” health-related data to help the state with its COVID-19 response. In an April 3 email obtained by 5280, Palantir executive Medhi Alhassani told state officials the company was in the process of “on-boarding local and emergency and healthcare staff in Colorado” into a program that could bring together “patient-level” electronic health records, hospital capacity information, and supply chain data for critical supplies—among other things—for policy analysts and decision makers. Alhassani offered Palantir’s service for free. Another Palantir executive also emailed Colorado officials “seeking conversations with state leadership and hospitals to explore how we might together contribute to the overall [pandemic] response” with software that would be “the single point of data truth and common operational picture for state, federal, and private leaders in response to the COVID-19 pandemic.” In yet another email, the executive wanted to know how state officials were “incorporating economic data into policy decisions,” adding the company had “been approached by a client who handles a high volume of Colorado credit card transactions to see how their information might be useful.” It’s unclear whether state officials responded to that request.

In a statement to 5280, a state spokeswoman said Colorado has an “End User Agreement” with Palantir “as part of the U.S. Department of Health and Human Services and White House Coronavirus Task Force requirements for reporting hospital and ventilator use data to the federal government.” She added that the program “allows Colorado access to anonymized data provided by Colorado hospitals through this platform. Prior to this agreement, there is no record of transactions or contracts with this entity.”

“As a state, we absolutely have to be on top of what Palantir is doing and what it might want to do in our state down the road,” says Gonzales, the state senator. This year, Gonzales was preparing to introduce a data privacy bill in the Colorado General Assembly—“to set clear guardrails and break the link” between data collection and its usage among public entities like law enforcement—but the pandemic and issues related to systemic racial injustice forced a hearing on her proposal to be postponed. She plans to introduce her bill during the next legislative session. “If anything good can come out of Palantir’s relocation, it’s that maybe we start to learn some lessons,” Gonzales says. “The question now becomes whether this pushes people over the line and we finally stand up and say no.”

For Palantir’s part, Rascoff says the company “will have all sorts of conversations with all sorts of leaders and absolutely welcomes conversations. It’s impossible to be a responsible corporate citizen of Denver and Colorado without engaging proactively with leaders. That includes meeting with people who, for whatever reason, have disagreements with Palantir or the Palantir they’ve read about in the newspaper.

“What I hope to be the case,” Rascoff continued, “is that members of this community take pride in being the home of this organization, that all sorts of Denverites and Coloradans become involved in the company, one way or the other.”

About a month after the announcement of Palantir’s move, Denver City Councilwoman Jamie Torres attended a hearing to discuss the upcoming budget with city staff. As the former deputy director of Denver’s Human Rights & Community Partnerships Agency and former director of the city’s Office of Immigrant & Refugee Affairs, Torres had long advocated on behalf of the city’s immigrant population. Through her work representing west Denver on the City Council, she’d continued her interest in community policing, especially the ways in which officers collected and interpreted information to execute their jobs.

When Palantir relocated, Torres had questions about city contracts and turned to members of the city’s Technology Services Department. She asked about the ethics of working with data companies that want to partner with the city. The department’s officials stared at her. “Our tech services people didn’t even know about Palantir,” she says.

Torres already knew about the ways the company had given free, or reduced-cost, software to government entities, some of which can cost tens of millions of dollars. Palantir had given free copies of its software to members of the U.S. armed services and in some cases helped train soldiers who would use the company’s product on the battlefield and eventually push contracts its way. In 2012 Palantir partnered with New Orleans police—without public knowledge—on a pro-bono predictive policing program that allowed Palantir to create lists of residents deemed likely to commit or be victimized by violence. The contract was renewed three times before a journalist discovered its existence in 2018. The agreement ultimately was canceled.

A Denver ordinance requires City Council approval on city contracts only when they exceed $500,000. Despite Palantir’s suggestion that it wasn’t looking to use its move to generate business in Colorado, Torres doesn’t think it’s too far-fetched to believe the company’s recent relocation would open up an avenue with its new neighbors. “We’re right here, and they’re right there,” she says. Academic research has shown that data mining among law enforcement often can lead to less hands-on policing and more covert surveillance, which could be an attractive option for the Denver Police Department, particularly following criticisms over the department’s handling of the Black Lives Matter protests this past summer. If Palantir were to offer police free services to monitor Denver protestors in the future, “no one on [the City Council] would know a thing about it,” Torres says. “There are red flags on this everywhere. It’s horrifying.” (A spokesperson for the Denver Police Department says it “has never had a contract with Palantir nor are we considering a contract with Palantir in the future.”)

Torres’ ethics question to the Technology Services Department wasn’t meant to be a gotcha moment, the councilwoman says, but rather a way to introduce Palantir into the conversation. “It’s fair to ask these questions,” Torres says, adding that she’s open to strengthening Denver’s decision-making that has to do with civil liberties and data collection. She hopes the rest of the council agrees with her but admits it might take time for members to wrap their minds around the company’s work and what the relocation might someday mean for the city. “We know a little about Palantir’s footprint here,” she says. “But really, we don’t know anything at all.”

Roughly 50 protestors gathered outside Palantir’s office this past September, blocking the sidewalk and spilling into Blake Street. Onlookers across the street stopped to watch; employees at a restaurant next door huddled and pointed.

The event, dubbed an “unwelcome party,” was coordinated in part by the local chapter of Mijente, a national advocacy group that has examined government documents over the years to uncover Palantir’s work on behalf of ICE. Mijente had coordinated a “good riddance party” in Palo Alto a day earlier and planned another event in New York City, in anticipation of the company’s direct listing on the Nasdaq. (After going public, Palantir’s market cap ultimately reached $16.5 billion.)

The protestors in Denver chanted “No tech for ICE!” while speakers detailed Palantir’s role in the Mississippi immigration raids and the company’s work with law enforcement. Colorado’s universities should prevent Palantir from participating in job fairs, protestors said, and local governments should pledge to keep Palantir’s software from being used on citizens. A banner that read “Palantir Get Out Of Here” was brought to the front of the SugarCube building. At one point, a piñata with Palantir’s logo was placed on the sidewalk. Blindfolded protestors took turns taking whacks at it with a stick. When the piñata didn’t immediately burst open, one of the organizers saw the moment as a metaphor. “Like Palantir,” the woman yelled into a megaphone, “this isn’t going to be easy to break!” Then someone took the stick and smashed a hole in the piñata, tearing part of the Palantir logo. Candy spilled onto the concrete, and everyone cheered.