Inside Palantir’s AI Empire

Surveillance, Government Contracts, and the Future of Civilian Data

Alex Karp isn’t your average tech CEO. With his unruly curls, philosophical monologues, and unrelenting belief in the power of software to protect the Western order, Karp has taken Palantir Technologies from an obscure government contractor to a global AI superpower. But as Palantir’s international influence grows, so too does the scrutiny—and now, the backlash.

This week, Palantir once again grabbed headlines after a New York Times exposé revealed the company’s deepening entanglement with U.S. government agencies, including its work with the Internal Revenue Service (IRS). According to the article, Palantir has assisted federal departments not only in defense and border enforcement, but also in augmenting the government’s ability to investigate civilians—particularly in tracking tax evasion, wealth movements, and financial behavior across American households.

The revelation was thrown back at Karp during a fiery segment on CNBC’s Squawk Box. “Are you comfortable,” the host asked, “with Palantir’s technology being used to help the IRS monitor American citizens under the guise of AI-driven efficiency?”

The reference to the Times article was pointed—and the tension in the studio palpable. Karp’s response was sharp, if not defiant.

“We build tools for institutions that maintain democratic order—not destroy it,” Karp said. “If your concern is with the IRS auditing billionaires using legal loopholes, then let’s have that conversation. But don’t confuse Palantir with some Orwellian machine. We don’t write the laws—we give institutions clarity in a world overwhelmed by data.”

The exchange captured national attention, with Karp pushing back hard against claims of surveillance overreach. Watch a snippet from the CNBC interview segment below:

Yet, critics argue that’s precisely the problem. The systems Palantir builds, designed originally for military precision and battlefield intelligence, are now being quietly adapted for domestic use—often without public oversight or legislative debate. And Karp, whether intentionally or not, has positioned himself and his company in the center of that uncomfortable reality.

From Espionage to Enterprise

Founded in 2003 with early backing from the CIA’s venture arm, In-Q-Tel, Palantir made its name helping the intelligence community connect data points in the war on terror. But that was only the beginning.

Today, Palantir’s platforms—Gotham and Foundry—serve everyone from defense agencies to hospitals and hedge funds. Its $795 million Project Maven deal with the U.S. Army is transforming how war is waged with real-time battlefield AI. Meanwhile, at Tampa General Hospital, Palantir’s tools are determining patient logistics and bed allocation, proving the company’s civilian reach is not theoretical—it’s operational.

And then there’s the IRS contract.

According to the New York Times report, Palantir has been instrumental in helping the IRS modernize its data aggregation systems, including AI-driven models that flag unusual financial activity. 

Defending the contract, Karp told CNBC in a Thursday interview, “We’re going to use the most secure platform in the world to replace in-depth software with cheaper, better software that is more efficient.”

While supporters argue these tools are vital in catching large-scale tax evasion, civil liberties groups warn of the slippery slope—particularly when the tech infrastructure is built by a defense contractor with deep roots in national security.

“This isn’t a tax audit—it’s a military-grade data operation,” said Jay Stanley, senior policy analyst at the ACLU. “When you give intelligence-level tools to civilian agencies, you’re shifting the balance of power between citizens and the state. And no one voted on that.”

Karp, unsurprisingly, doesn’t see it that way.

The Karp Doctrine - The Technological Republic says it all

In his latest book, The Technological Republic: Hard Power, Soft Belief, and the Future of American Prosperity (February 2025), co-authored with Nicholas Zamiska, Karp opens by declaring that Silicon Valley has lost its way. The Wall Street Journal described the book as “no less ambitious than a new treatise in political theory... nuanced, caveated, largely compelling, and reassuringly humble.”

During his CNBC appearance, Karp dismissed accusations of overreach. “I built Palantir so the West would win. We partner with institutions that follow the rule of law. The discomfort some feel is the discomfort of change—not of wrongdoing.”

Wall Street Cheers, Washington Listens

Despite the controversy, investors can’t seem to get enough. Palantir’s shares have jumped 74% this year, pushing its market cap to nearly $200 billion—surpassing even Lockheed Martin. The company was recently added to the S&P 500, a symbolic coronation that places it among America’s corporate elite.

Karp told CNBC in an interview on Thursday that governments and clients choose Palantir because “they’re buying the best product” that prioritizes security and civil liberties.

Yet the duality remains: Palantir is both protector and provocateur. It empowers governments to act swiftly—but leaves many wondering who’s watching the watchers.

As AI becomes the next frontier of state power, the question is no longer whether Palantir will shape the future. It’s whether that future will resemble the open democracy Karp claims to defend—or something more opaque.

In the blurred zone between defense, data, and domestic surveillance, Palantir isn’t just building software. It’s rewriting the blueprint of modern governance—and forcing the rest of us to ask: at what cost?