ready to make its public market debut.

Co-founded by Peter Thiel back in 2003, i ts mission: Providing software

that customers use to integrate volumes of data, from images to

spreadsheets, into a central platform where it can then be securely

analyzed and interpreted.

News of Palantir's plans to go public, as well as its recent announcement

that it will be relocating its headquarters from Palo Alto to Denver has

put the secretive software company in the spotlight.

Best known for its work with U.S.

government agencies like the CIA, the Department of Defense and, most

controversially, Immigration and Customs Enforcement, the company was

founded following 9/11 with the goal of defending American interests.

The core mission of our company always was to make the West, especially

America, the strongest in the world, for the sake of global peace and

prosperity. But in recent years, Palantir has also courted customers like

Airbus, Chrysler and BP.

Commercial customers now make up about 50 percent of the company's

revenue, a number that's trended upwards over the past decade.

And even though Palantir has never turned a profit, revenue has been

growing as losses have narrowed.

Perfectly normal for a software company to show that sort of trajectory

going into their IPO.

The question is, does the economic model over time look like one that will

eventually produce profits?

And you can certainly get there.

But while longtime investors are eager for the company to go public, for

others, confusion remains about what it is exactly that Palantir does and

why their work with law enforcement agencies has raised eyebrows.

The name Palantir comes from the Lord of the Rings.

In the fantasy series, Palantiri are spherical stones that help powerful

users see what is going on in other parts of Middle-earth and communicate

with each other. Founded in 2003 by billionaire Peter Thiel, alongside

current CEO Alex Karp, Joe Lonsdale, Stephen Cohen and Nathan Gettings,

Palantir's tech helps detect unusual or suspicious patterns in large

datasets, using techniques that the founders learned working together at

PayPal. The CIA was one of the company's earliest investors and its only

customer for a number of years.

Eventually, other intelligence agencies like the FBI and the NSA jumped

aboard, using the company's customized data analytics capabilities to

track and capture terrorists, insurgents and drug smugglers.

They cite Afghanistan and Iraq as two examples of places where soldiers

were mapping networks of insurgents and makers of roadside bombs by hand.

So they actually were bringing in technology to do things that

intelligence agents on the ground were having to do manually in very

dangerous places.

The company's software has been credited with helping to find and kill

Osama bin Laden. And though this has never been confirmed, Palantir

certainly has not disputed it.

The tech's also helped to uncover Bernie Madoff's Ponzi scheme and rooted

out Chinese spyware installed on the Dalai Lama's computer.

We work hand-in-hand with most of the special operators in the Western

world. We work hand-in-hand with most of the clandestine services.

We're in over 40 countries.

Today, the company increasingly works with high-profile commercial

customers too. Its first was JPMorgan Chase, which adopted the software in

2009 to monitor employees who might go rogue.

However, the partnership ended in scandal when JPMorgan's Special

Operations Lead used it to spy on top executives.

Others have continued to express interest, though.

Fiat Chrysler now uses Palantir to identify potential faults in car parts.

Airbus uses it to respond more quickly to manufacturing problems,

accelerating the production of its 350 aircraft.

And BP uses it to analyze drilling data, reportedly leading to a 10

percent increase in oil production in the North Sea.

This is a hefty piece of software that runs across an enterprise and is

used for understanding everything that a company faces, whether it's their

customers, their supply chains, downtown, geographies where there's

growth, where their competitors are gaining share.

As revenue from the commercial sector has increased over the years, CEO

Alex Karp has had to rethink his historical dismissal of salespeople.

We don't look like a classic enterprise software company.

We have no salespeople.

Almost everyone here is an engineer.

Not anymore. Karp's been building out a sales team.

And in 2019, the company spent 61 percent of its revenue on sales and

marketing. However, long-standing government contracts remain integral to

the company's revenue as well as its reputation.

And during the coronavirus crisis, Palantir has formed a number of new

partnerships too, with the VA, the National Institutes of Health and

Britain's National Health Service, helping these agencies, as well as the

CDC, to track the spread of the virus and allocate resources.

In order to make decisions r ight now, in order to know where the PPEs need

to go, in order to know when and where you're going to reopen , you want

all the analytical models, all the pieces of information, all in one

place. Palantir is really designed to thrive in a crisis.

But especially under the Trump administration, t he company's work with ICE

and police departments has raised considerable concern in the

liberal-leaning Silicon Valley, leading Palantir to double down on its

commitment to law enforcement and national defense.

So I do think this idea of like nationalism and libertarianism is kind of

intersecting in a very interesting way and Palantir seems to represent all

of that. Protests against Palantir first gained traction in 2018,

primarily in response to the company's contracts with Immigration and

Customs Enforcement, which are worth up to 92 million dollars.

The agency has cracked down on illegal immigration through workplace raids

and separating families at the border.

My house has been protested for many months, almost every day.

Our office has been protested.

Many Palantirians protested against it internally.

Some people were so upset about it that they left.

These are very hard decisions.

Co-founder and board member Peter Thiel is probably president Trump's most

famous Silicon Valley backer, donating 1.25 million dollars to his 2016

campaign. Karp's politics differ, but he says that Palantir remains fully

committed to aiding the U.S.

government. I've never stopped being critical of this administration.

I'm not planning to vote for this administration.

So there are things I would do differently.

The core issue though is, who decides?

The small island in Silicon Valley that would love to decide what you eat,

how you eat and monetize all your data, should not decide who lives in

your country and on what conditions.

There are elections. There are rules.

They should be enforced. Karp's ethos also holds true for Palantir's work

with police departments, from New York City to Los Angeles, New Orleans

and Chicago, who have used the tech for surveillance of criminal suspects

and predictive policing, a tactic that civil liberties groups say leads to

over-policing of minority neighborhoods.

But can Palantir really claim to be above the political fray?

I understand the desire to be neutral and to kind of say, hey we're gonna

play by the rules.

That is a logically coherent stance if companies are also neutral with

regard to who makes the laws.

But hold on, if you're willing to back political factions with your own

money, you can't say while in this aspect of our business, we do influence

policy and politics. But over here we are politically neutral.

It doesn't work that way. Other tech companies like Google have backed out

of controversial contracts with the Defense Department.

But Palantir sees that as an abdication of responsibility.

Peter and I built a very patriotic company.

Google is clearly not a patriotic company.

Karp also hit back against the culture of the Valley in the company's S-1

filing to go public.

Here's what he had to say: 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.

Our company was founded in Silicon Valley, but we seem to share fewer and

fewer of the technology sector's values and commitments.

In August, the company announced it will move its headquarters to Denver,

Colorado, likely both a financially and morally-motivated decision.

The Valley has basically sold its soul to an advertising model where it's

OK to sell your data, but it's not OK to support the country.

And they didn't want to be part of that ecosystem and didn't feel that

that ecosystem was aligned with their values.

So what does all this controversy mean for investors?

For those who believe in Palantir's mission, it could be an asset.

And for those with qualms, while it ultimately may not mean much.

The general belief around the Valley is that public market investors in

particular talk a big game about governance and about things that they

view as acceptable and unacceptable, and then they buy the stock anyway.

Though Palantir has yet to turn a profit, t his isn't of considerable

concern to investors, who are used to betting big on tech companies

operating at a loss.

What will affect the company's value is whether investors view it more as

a high-growth tech company or a lower-margin consulting firm.

That combination makes this a bit of a Rubik's Cube for investors, because

it's not a pure play software model.

For most of its history, Palantir has spent heavily on software

customization services for both government agencies and large

corporations. It is a very costly business to run.

But if they can automate their own processes and have a more efficient

sales process and get the biggest customers to continue to buy more, then

their operating metrics do improve over time.

As of late, that's what Palantir has been trying to do.

And now it offers two fixed-fee platforms, Gotham for government clients

and Foundry for the private sector.

The company's target market is said to be the 6,000 companies that make

500 million dollars or more in revenue.

So the average customer spends over five million dollars a year on

Palantir's product.

The top 20 customers account for roughly two thirds of their revenue.

They say they only have about 125 customers.

So this is fundamentally different than your Zoom and your Slack.

It is not for everyone.

In 2015, when Palantir raised its last funding round, the company's

valuation was upwards of 20 billion dollars.

But lately, share prices have been all over the map, indicating a

valuation range of anywhere from less than 10 billion to over 20 billion.

They're trying to show investors that they do have this really big market

opportunity, that they have a bunch of potential customers out there.

And that's where the skepticism is.

The true value will be clarified at the end of September when Palantir

completes its direct listing, a process that is similar to an IPO, except

that the company won't sell any new shares.

It will just unleash those held by existing investors.

Thus, the shares will be priced based on investor demand and if the stock

trades higher than expected, that value won't be handed to brand new

shareholders. I think the Palantir IPO is going to signal to venture

investors and others that serving the Department of Defense and military

business is going to be worthwhile.

Karp certainly hope so, saying that the future of our nation depends on it.

The country with the most important AI, most powerful AI, will determine

the rules. That country should be either us or a Western country.

Palantir doesn't do business with China, the U.S.'s main competitor when it

comes to AI. So if we bring our A game, we will win.

If we bring our D plus game because most people in the Valley live on an

island where this seems like a questionable project, they will win.