How a US tech firm filled its coffers by helping Israel bomb Gaza & enabling Trump to spy on his critics

These AI systems have been so successful that on Monday (August 4), Palantir, which was founded in 2003, reported a jump of 48% in its sales in this year’s second quarter. Its revenue touched $1 billion — the largest quarterly haul since going public five years ago. And this increase in the company’s revenue was fueled by a 53% spike in US government sales.

How did Palantir develop these AI systems? Why is the Trump administration buying them? What are the concerns about them?

Turning Gaza into AI lab

Before Palantir began to sell its products to the Trump administration, the company trained, tested, and refined its AI systems in Gaza. Since at least 2013, Palantir has been assisting Israel’s military intelligence Unit 8200, which specialises in eavesdropping, codebreaking, and cyber warfare.

Palantir’s AI systems were part of an ecosystem created by Israel to surveil Palestinians in Gaza and the West Bank. These programs were trained on data in the form of intelligence reports on Palestinians in the occupied territories. In 2014, whistleblower Edward Snowden released a trove of documents which showed that the US National Security Agency (NSA) was a key source of this data for decades.

In an interview with Wired, Snowden said that the NSA would secretly provide “Israel with raw, unredacted phone and email communication between Palestinian Americans in the US and their relatives in the occupied territories”. He was concerned that by sharing those private conversations with Israel, “the Palestinians in Gaza and the West Bank would be at great risk of being targeted for arrest or worse”.

Snowden’s concerns were not unfounded. After Israel began its onslaught on Gaza in response to Hamas’ October 7 attacks, the Jewish country used Palantir’s AI systems, such as “Lavender”, “Gospel”, and “Where’s Daddy” to identify “targets” for airstrikes based on Israeli mass surveillance records of Palestinians in Gaza.

A 2024 investigation done by +972 Magazine, based in Israel, found that systems like Lavender would assign residents of Gaza a numerical score indicating their suspected likelihood of being a member of an armed group. However, this criterion of identifying someone as, say, a Hamas operative was quite broad because “being a young male, living in specific areas of Gaza, or exhibiting particular communication behaviour was enough to justify arrest and targeting with weapons,” the investigation revealed.

With their effectiveness proven in the battlefields of Gaza, Palantir’s AI systems have gained popularity among several countries which are buying them to surveil their citizens.

Helping Trump target immigrants & his opponents

The purchase of Palantir’s products by the US government has seen a major spike after Trump returned to the White House in January this year. That is because in March, the President signed an executive order requiring all agencies and departments of the federal government to share data on Americans. And to carry out this job, Palantir Technologies was chosen.

One reason for the company’s selection is that its co-founder, Peter Thiel, is a long-time ally of Trump, and a close friend of billionaire Elon Musk, who ran the Department of Government Efficiency (DOGE).

Palantir’s systems are believed to combine data gleaned from the Department of Homeland Security, the Department of Defence, the Department of Health and Human Services, the Social Security Administration and the Internal Revenue Service.

Experts, Republicans, and former Palantir employees have raised concerns that the technology would make it easier for Trump to spy on his critics, and find and detain immigrants.

For instance, Representative Warren Davidson, a Republican of Ohio, told Semafor, “When you start combining all those data points on an individual into one database, it really essentially creates a digital ID. And it’s a power that history says will eventually be abused.”

In May this year, 13 former Palantir employees signed an open letter, urging the company to stop working with Trump. The letter said, “By supporting Trump’s administration, Elon Musk’s DOGE initiative, and dangerous expansions of executive power, they [Palantir’s executives] have abandoned their responsibility and are in violation of Palantir’s Code of Conduct.”