As Palantir May Face The End Of Its Federal Contract, Big Tech Is Forced To Contend With A Future Of Democrat-Enforced Regulations

Palantir, the data-mining firm created by investor Peter Thiel, who is also a close ally of former President Donald Trump, is known for its work with global intelligence, military, and law enforcement agencies. In 2020, Palantir was awarded a contract with the Department of Health and Human Services (HHS) to help the federal government develop a better system to track how hospitals across the country handled COVID-19 cases. The system works by tracking supplies, cases, and testing.

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In the past four years, executives and tech leaders associated with Palantir as well as other companies, including Oracle tied themselves closely with the Trump administration. Whether it was hosting fundraisers, bidding for controversial immigration contracts, or joining forces with the White House to take down TikTok, these companies drew political lines.

And now those lines are causing issues as the Biden administration comes into power.
According to a report by the Daily Beast, Trump’s administration officials suggested to the transition team for President Joe Biden to do away with the COVID tracker developed by Palantir due to its inaccuracies.

While Palantir has contacted Daily Beast to suggest that the report is inaccurate, analysts do expect the company’s growth to decelerate in 2021.

Citigroup analyst Tyler Radke explained, “We are also more skeptical on the PLTR bull case in the commercial business, where there is optimism that PLTR’s simplified new products can drive an inflection in customer growth. Here, we see high levels of competition and the lack of investment by PLTR in the 'right areas' limiting success.”

Though there are many other companies besides Palantir that have controversial federal contracts. Since 2016, Microsoft has had more than 5,000 subcontracts with the Department of Defense and various federal law enforcement agencies. Amazon has also agreed to more than 350 subcontracts with the military and federal law enforcement agencies, like ICE and the FBI, since 2016, and Google has more than 250, according to analysis from Tech Inquiry.

With a Democratic president and a Democrat-controlled Congress, there are fears of an increase in criticism of Internet company market power. In a 450-page report released in October, Democrats recommended Congress curb anticompetitive practices from Amazon, Apple, Google, and Facebook by taking action, including "forcing tech companies to be broken up.”

Many are calling for regulations that simply didn’t exist under Trump. So as Palantir stares down the barrel of the end of its federal contracts, that could also be the case for other tech giants.