Palantir Technologies is back in the spotlight, this time for not-so-positive reasons.

The multi-faceted tech company has emerged as a leader in both the artificial intelligence (AI) and defense spaces, despite its founding as a data analytics provider. Capitalizing on the recent AI boom, it has performed extremely well, rising more than 300% over the past year.

As a company that has benefited significantly from lucrative defense contracts, Palantir entered 2025 in an excellent position as Donald Trump returned to the White House. CEO Alex Karp’s ties to Elon Musk through fellow Palantir founder Peter Thiel, a noted venture capitalist, likely helped reassure investors that the company’s growth would continue.

However, the company has recently begun a new project that has sparked a backlash from some unexpected groups, including the tech community. One industry expert recently issued a shocking take on the company’s decision.

Palantir’s newest deal is raising red flags from some shocking sources

Musk isn’t Thiel’s only White House connection, despite their well-publicized relationship. He also helped Vice President JD Vance begin working in the venture capital (VC) field and helped fuel his political ambitions.

As Thiel still serves as chairman of Palantir, many experts speculated that his White House connections would help the company procure even more defense contracts during Trump’s time in office. So far, these theories are proving correct, as Palantir recently landed a $30 million deal to provide software to the Department of Immigrations and Customs Enforcement (ICE).

Under this agreement, Palantir’s technology will be used to track people in the U.S. who have overstayed their visas as part of the White House’s immigration enforcement initiative. So far, the news has garnered significant criticism from many, including one respected tech sector leader.

Paul Graham, a venture capitalist, computer scientist, and author, is well known for startup accelerator and VC firm Y Combinator. This influential company has helped fund many prominent tech startups including Airbnb, DoorDash, and Stripe.

But Graham recently posted a scathing critique of Palantir on X, calling the company out for its decision to work with ICE.

In an X post, he shared a link to an article announcing the news, stating, “It's a very exciting time in tech right now. If you're a first-rate programmer, there are a huge number of other places you can go work rather than at the company building the infrastructure of the police state.”

Graham said he would remove the post if Palantir committed publicly to never build technology supporting government actions that could violate civil liberties, regardless of individuals' citizenship status.

Many comments on the link shared by Graham make it clear that plenty of people share his disapproval of the software system, titled ImmigrationOS, that Palantir is supplying to ICE. 

While the company claims the platform will help streamline the entire process and increase efficiency, Graham’s argument that it is overly invasive seems to be popular.

Palantir responds to Graham’s take on its technology

One Palantir executive issued a detailed response to Graham’s post, stating that he believes it will help the company attract new talent.

Ted Mabrey, the company’s global head of commercial, compared Graham’s argument to that of the Google employees who opted against the company’s work with Project Maven. A Department of Defense initiative to implement AI tools into modern warfare, Google attracted significant backlash for its involvement in the program before walking away in 2018.

“Google embraced the luxury belief that our way of life is given and that, as the best and brightest of us, they were above wrestling with the hard questions in the muck and mire of how to continue to ensure their privilege,” Mabrey states. “It was much easier to sell ads.”

That said, other big tech companies have explored systems similar to Palantir’s ImmigrationOS. In 2024, Microsoft announced a partnership with Palantir that they claimed would bring “some of the most sophisticated and secure cloud, AI, and analytics capabilities to the U.S. Defense and Intelligence Community.”

In response to Mabrey’s detailed argument, Graham reiterated his offer to delete the post if Palantir committed publicly to not building the technology. Mabrey refused to engage with the question, describing it as being “in bad faith.”

Mabrey’s statements strongly imply that Palantir doesn’t care about Graham’s opinion of its new technology platform or its plans for it. As of now, it remains uncertain if the company will issue any further statements regarding his criticisms of its work.