Why Palantir’s departure won’t doom Silicon Valley

August 27, 2020, 1:11 PM UTC

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Fortune senior writer Michal Lev-Ram in for Adam this morning.

I’ve seen many startups come and go in downtown Palo Alto—Google, PayPal, and Facebook, to name just a few. These departures have primarily been driven by necessity, either because a company outgrew its digs, or because it had to shut down, sometimes in a spectacular flurry of failure. (Remember Color, the photo-sharing app that raised more than $40 million before it had a single user and then quickly collapsed?) Not so with Palantir, though. The data analytics company is leaving my adopted hometown not because of hypergrowth or sudden failure, but due to irreconcilable differences.

Earlier this week, Palantir announced its intent to go public but also made news for moving its headquarters from Palo Alto to Denver. “Our company was founded in Silicon Valley,” Alex Karp, Palantir’s CEO, wrote in a letter accompanying Palantir’s filing. “But we seem to share fewer and fewer of the technology sector’s values and commitments.” 

Karp’s beef with the Valley’s “engineering elite,” as he referred to local talent, appears to have two prongs: In his letter, he called out both consumer Internet companies’ reach into the most intimate aspects of our lives and the backlash against companies who sell to defense and intelligence agencies—like Palantir. 

Pre-pandemic, Palantir did generate unwanted attention for such contracts. Activists took particular issue with the software company’s business with the Immigration and Customs Enforcement agency, organizing protests outside of its Palo Alto offices on several occasions.

Interestingly, there were others who didn’t love the company’s presence in Palo Alto, but for very different reasons.

Palantir once dominated downtown Palo Alto. You couldn’t blow a vape cloud here without it hitting a young engineer in a black Palantir jacket. Over a number of years, the company took over so much office space—even repurposing an entire building to serve as its corporate cafeteria—that some in Silicon Valley complained it had “sucked the life out of the startup ecosystem in Palo Alto.” Being the largest commercial tenant meant that there was little (literal) space for fledgling startups, or at least that was the allegation.

Quietly, Palantir has already vacated several of the buildings it used to fill. Now, with the company officially moving its HQ to Denver, you’d think its critics would rejoice. That’s not exactly the case.

“Pre-COVID, it would have helped the revival of Palo Alto as a startup spot,” Jeff Clavier, founder and managing partner of Uncork Capital, says of Palantir’s departure. The Silicon Valley investor is a long-time former resident of Palo Alto and still rents a small office in town. I first interviewed him in the mid-2000s, when I was a reporter at Business 2.0., a magazine that was so good at chronicling the rise and fall of tech companies that it too experienced a dramatic boom and bust. Over the years, I’ve had several conversations with Clavier, including about Palantir’s presence in Palo Alto, which he believed stifled the startup scene. Now, he’s not so sure the empty buildings Palantir leaves behind will be filled with new investment opportunities, at least not any time soon.

“There are good reasons to leave California,” Clavier told me over the phone, after apologizing for having to speak through a mask. (In case you haven’t heard, the Bay Area is now dealing with the pandemic and a horrifying string of fires which have burned homes and forests and made our air almost unbreathable.) “And we’re entering a phase where founders can make personal choices [on where they want to be located].”

Does that mean Palo Alto will never again be a center for entrepreneurs? I wouldn’t be too concerned. If covering the Valley from inside the Valley has taught me one thing, it’s that, like annoying buzzwords, companies come and go. Of course, if Stanford University and Sand Hill Road ever move to Denver too, then we really are screwed.

Michal Lev-Ram



This edition of Data Sheet was curated by Aaron Pressman.


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One thing leads to another. A few days after the newest Fitbit devices debuted, Amazon unveiled its own activity tracker dubbed the Amazon Halo. The $65 device also includes six months of a free A.I.-driven health advisory service that tracks body composition, tone of voice analysis, sleep and activity tracking. It's $4 a month after the first six free. 

Everything looks like a nail. Lawmakers are debating legislative fixes for the tech industry in the wake on their yearlong investigation that culminated in the "Big Four" CEOs testifying last month. Rep. David Cicilline, chair of the House antitrust committee, says one possibility is a law forcing the separation of different businesses, modeled after the Glass-Steagall Act of 1933 (which banned banks from investment banking activities).

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Our breakthrough came when we noticed that there was some sort of issue with satellite imagery tiles loading in the vicinity of one of the known camps while using the Chinese mapping platform Baidu Maps. The satellite imagery was old, but otherwise fine when zoomed out, but at a certain point, plain light gray tiles would appear over the camp location. They disappeared as you zoomed in further, while the satellite imagery was replaced by the standard gray reference tiles, which showed features such as building outlines and roads.

...We analyzed the masked locations by comparing them to up-to-date imagery from Google Earth, the European Space Agency’s Sentinel Hub, and Planet Labs.

...In total we identified 428 locations in Xinjiang bearing the hallmarks of prisons and detention centers. Many of these locations contain two to three detention facilities — a camp, pretrial administrative detention center, or prison. We intend to analyze these locations further and make our database more granular over the next few months.


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An interesting gadget arrived at my house via special delivery from Microsoft on Wednesday. It's the new Surface Duo folding phone/tablet. I'm not allowed to show or discuss how the software works yet but I can say that it's very slick and attractive and slightly smaller than my favorite paperback (when folded closed). Stay tuned for a full review.

microsoft surface duo

Aaron Pressman



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