Palantir sells fraud detection software to governments and businesses all over the world. Given its own murky past, is that a good idea? Claudia Weisenberger with the story.
In 2011, a United States federal court approved a settlement of a lawsuit that said one of Palantir’s own senior employees had used a fake company — registered to his parents — to steal software from the i2group, a competitor. It led to allegations that Palantir based its own software on what it stole, although that has never been proven.
The Palantir employee at the heart of the lawsuit and subsequent allegations, Shyam Sankar, is now Palantir’s Chief Technology Officer and a billionaire.
“Land and expand”
Palantir was co-founded in 2003 with CIA seed funding by Peter Thiel — the billionaire who later funded the lawsuit that destroyed Gawker, a media outlet that had investigated him.
The company markets itself as the product of fraud-detection expertise pioneered at PayPal, the payments company Thiel co-founded with Elon Musk.
The key aspect of the allegations made by i2group is that Palantir used what it had taken to build a migration tool — one that allowed government analysts to move their entire historical intelligence data from i2 into Palantir’s platform in a single step.
That eliminated the biggest barrier to switching: the cost and complexity of starting again with years of data locked in a competitor’s system. Palantir did not just allegedly steal software. It allegedly stole the key that unlocked every government customer i2 had built.
That is the ‘land and expand’ strategy at its most ruthless.
Why should we care?
In Australia, Palantir is embedded across the agencies that hold the most sensitive data about its citizens and businesses;
- Through AUSTRAC, it analyses financial transactions — not just of NDIS participants, but of every individual and company flagged for financial intelligence.
- Through the Australian Criminal Intelligence Commission, it processes criminal intelligence.
- Through the Department of Defence and the Australian Signals Directorate (ASD), it operates inside Australia’s defence and signals infrastructure.
- Through the Fraud Fusion Taskforce, it shares financial intelligence about NDIS participants across 25 government agencies.
The Australian government chose this company for all of these roles without conducting an ethics assessment. It did not examine the company’s history.
During those two years, it faced no consequences, no suspension and no public explanation.
Senator David Shoebridge has asked. The government has not answered. A company that a federal lawsuit once accused of obtaining software under false pretences was operating inside Australia’s most sensitive agencies without the paperwork to do so. The rules existed. They simply weren’t applied to Palantir.
The Australians whose health records, financial data and disability information flow through Palantir’s systems were never told that Palantir had settled a lawsuit accusing its own employees of using fraud to build the company.
Will Coles be the first of many?
On 7 September 2026, Coles confirmed it would not renew its Palantir contract beyond 2027, following a GetUp campaign that gathered 85,000 signatures and placed billboards outside 700 stores telling shoppers what Palantir actually does: supplying battlefield targeting systems to the US military, that its tools are used in ICE deportation raids, and that its co-founder Peter Thiel wrote in a published essay,
he no longer believes freedom and democracy are compatible.
Under the three-year deal signed in February 2024, Coles had given Palantir access to data covering 840 stores, 120,000 staff and 9,000 suppliers.
Coles said the two companies had ‘agreed to conclude their partnership after three years of collaboration.’
Reading between the lines: 85,000 signatures, 700 billboards and a public campaign connecting a supermarket to CIA-linked surveillance technology is not good for the weekly shop.
When its customers found out who they were dealing with, they objected. Coles acted within months. The Australian government has known for years. It has not acted at all.
Perhaps it should…
The global reckoning over Palantir and Cellebrite – and the country that never asked
Claudia Weisenberger is a management consultant with deep experience in pharmaceuticals, hospital transformations, and strategic due diligence across four continents. She combines sharp analysis with hands-on execution.