Black billionaire Alex Karp’s Palantir secures $1 billion DHS deal 

Palantir Technologies, the data analytics firm led by tech billionaire Alex Karp, has secured a $1 billion software agreement with the U.S. Department of Homeland Security, putting its government business back at center stage. 

The five-year blanket purchase agreement allows Homeland Security and its component agencies to buy Palantir’s software licenses, maintenance and implementation services under pre-negotiated terms. The arrangement was published last week and first reported by Wired. 

For a company that generated $1.4 billion in revenue in the fourth quarter, the scale of the deal is significant.

DHS relationship since 2011

The agreement gives agencies including U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement access to Palantir’s tools without going through a fresh competitive bidding process for each purchase, up to the $1 billion ceiling. Pricing for specific products and services is set in advance. 

Palantir has worked with Homeland Security since 2011. This latest contract does not mark a new relationship, but it deepens an existing one and simplifies how the department buys its software. 

In an email to employees, Chief Technology Officer Akash Jain said the agreement could pave the way for broader use of Palantir’s technology across other federal agencies, including the U.S. Secret Service, the Federal Emergency Management Agency, the Transportation Security Administration and the Cybersecurity and Infrastructure Security Agency.

Palantir ICE debate intensifies

The deal has also renewed internal debate. Last month, following the killing of nurse Alex Pretti in Minneapolis, some employees raised concerns about Palantir’s ongoing work with Homeland Security, particularly with Immigration and Customs Enforcement, according to media reports.

Palantir’s leadership has long argued that its software supports lawful investigations and national security missions. Critics, including some inside the company, have questioned how the technology is used in immigration enforcement. 

The tension underscores a familiar challenge for Silicon Valley firms that straddle commercial and government work: growth can bring scrutiny as well as revenue.

Federal deal lifts Palantir backlog

Investors are now parsing the financial impact. It is unclear when the agreement was signed and whether it is already reflected in recent results.

Palantir’s remaining performance obligation, a measure of contracted revenue not yet recognized, rose to $4.2 billion in the fourth quarter from $2.6 billion in the prior period. 

Even without precise timing, the deal highlights how a single federal contract can add hundreds of millions, or more, to Palantir’s backlog. 

Karp’s Palantir: AI and Security

Founded in 2003 by Karp, Peter Thiel and others, Palantir built its early business on counterterrorism and fraud detection tools for government clients.

In recent years, it has pushed deeper into corporate America, marketing its Artificial Intelligence Platform to commercial customers while maintaining close ties to defense and intelligence agencies. 

For Karp, whose fortune is tied closely to the company’s stock, the Homeland Security agreement reinforces a core part of Palantir’s identity: a technology firm that remains deeply embedded in Washington even as it courts Wall Street.