Palantir’s big push into Canada

Big data company Palantir Technologies is not popular in Silicon Valley. Its CEO, Alex Karp, doesn’t even try to hide it.

Palantir relishes its contracts with the US government, no matter the department or agency. Meanwhile, Google has backed away from its involvement with the US Department of Defense after criticism from its employees, and Microsoft has been getting pressure from its employees to stop working with immigration enforcement agency ICE. Karp has blasted both companies for seemingly susceptible to pressure.

While Palantir is a deeply secretive company, investigations have detailed some of its operations to expand online surveillance capabilities at the US National Security Agency. It also helps ICE track and log migrants the agency is seeking to prosecute and deport.

Some of Palantir’s programs, available to hundreds of local police departments, can create expansive digital and physical portraits of individuals — phone numbers, social media accounts, social security numbers, even their travel history logged by licence plate cameras. That has created concerns about just how much information Palantir should be allowed to amass and disseminate.

The company has appeared indifferent to the criticism, making it pretty clear that it is happy to work with the US government — indeed, any government that meets its standards.

Questions around privacy, lawful access and surveillance fall to governments, Karp figures. “I do not believe that these questions should be decided in Silicon Valley by a number of engineers at large platform companies,” he told Bloomberg in August.

Governments, Karp said, are best suited to navigate those debates. So when Palantir decided to formally open a Canadian wing, there were few figures more suited to navigating that government relationship than David MacNaughton.

MacNaughton served as Canada’s ambassador to the United States for most of the Trudeau government’s tenure, becoming both Ottawa’s point person on managing the thorny relationship with the Trump White House and a trusted domestic advisor to the prime minister.

His appointment as the head of Canadian operations for Palantir, made public on August 9, is a clear sign from the Palo Alto company that, even as other big tech firms mark their independence from central governments, Palantir sees itself as being closely married to the state.

MacNaughton announced his resignation the day before, saying he would be “taking up a new challenge in the private sector” and stating that he would stay on as ambassador until the end of August. It is unclear what kind of interaction he may have had with Palantir while still serving the Canadian government that month.

The re-election this month of Justin Trudeau only further cements that link between Palantir and the Prime Minister’s Office, which may prove useful for the company.

Unlike many tech companies in Canada, Palantir won’t be headquartered in Waterloo or Toronto — instead, all the job listings for developers for the new office are based in Ottawa.

But what’s really behind Palantir’s arrival in Canada? Is Ottawa set to become a major player in the big data analytics game? Is Palantir just being shrewd?

Bad PR, but a path to profitability

Befriending the Canadian government might be equal parts optics and opportunity.

“We know how much controversy they’ve been facing,” says Cynthia Khoo, a research fellow with the Citizen Lab, which is based out of the Munk School at the University of Toronto. Khoo has been studying Palantir’s efforts to branch out into Canadian law enforcement.

To that end, setting up shop in Canada may be a bit of a rebranding exercise. Despite a recent dip in popularity at home, Trudeau represents a substantially brighter public friend than Donald Trump and the agents of ICE.

Khoo points out that Palantir has already opened up a partnership with the World Food Programme, to use its data analytics to help the United Nations program reduce costs and improve services.

Staffing, too, must be on Karp’s mind.

Last month, more than 1,000 students from 17 US colleges vowed to never work at Palantir, due to its support for American immigration enforcement. It doesn’t seem that the same outcry is present up north.

Opening a Canadian office appears to also make good financial sense. Despite boasting more than US$1 billion in sales, Palantir has not yet broke into profitability. Big infrastructure and research costs have kept it from turning a profit, and that, in turn, has delayed plans for a public offering.

Palantir has been trying to establish itself in Canada for some time.

According to registration documents, the company incorporated in New Brunswick in 2012, and listed its Ottawa and Vancouver lawyers’ offices as its headquarters (a common practice for companies still setting up operations.)

Calgary Police purchased Palantir software in 2013 and has continued using the company since then, though it seems few other local police departments followed suit. Company co-founder (and outspoken Trump supporter) Peter Thiel himself met with then-Foreign Affairs Minister John Baird in California in 2014, though it’s unclear exactly why. More recently, Palantir has been added to a list of trusted vendors for artificial intelligence software by Public Services and Procurement Canada. And earlier this year, the company won a $1 million contract with the Department of National Defence to provide data analytics software for the Canadian Forces Special Operations Command.

Generally speaking, though, Palantir’s growth in Canada has been somewhat slow. The company is trying to change that with its new office.

Palantir’s arrival also comes at a time when Ottawa is trying to get serious, quickly, about both its offensive and defensive cyber capabilities. Some of that work is in conjunction with its NATO allies and Five Eyes partners, but Canada is looking to build capacity independently, as well.

Under Bill C-59, which was passed in Parliament in June, Canada’s signals intelligence and cyber agency (the Communications Security Establishment, or CSE) now has the authority to conduct more active cyber operations at home and abroad.

Briefing materials published by CSE outline its case for such new authorities:

“Given that intelligence targets are dispersed in the vast global network or networks, the collection and use of certain pools of communications metadata can help CSE hone their intelligence investigations and better pinpoint the networks on which foreign targets operate and how they communicate. Only then can CSE begin to engineer solutions to collect information and provide important insights to the Government.”

It’s not clear that CSE and Palantir would work together, but it would be a natural fit, given the signals agency’s new mandate.

What makes Palantir attractive to clients is that it does not simply sell out-of-the-box solutions, but creates platforms which can plug into new or existing technology. While it’s hard to say exactly what work is being done in Canada’s intelligence agencies — Canadian security agencies do not comment on techniques or capabilities — Palantir’s technology is likely interoperable with the sort of solutions CSE already uses, improving its ability to interpret data and even track individuals.

And, Khoo points out, “they have the brand recognition, for better or for worse.”

The company’s goal for its Canadian activities is not uniquely government-focused. Palantir said in a press release that MacNaughton’s role will involve building relationships “with Canadian organizations that are looking to transform how they use and make the most of their data.” It cites healthcare and the financial sector, in particular, as possible growth markets.

New country, same ol’ concerns

While Palantir may have come to Canada to find new ways to do business, civil liberties and privacy advocates worry that it is looking to do much of the same work it has pioneered in America.

“What are they here to do?” Khoo wonders. “And why do they think it would be beneficial to launch operations in Canada?”

Khoo says if Palantir is in Ottawa to help law enforcement improve their legacy data management systems and to give private companies a hand in managing their networks, “that’s one thing.” But Canadian police, to date, have largely not gone down the path of expansive surveillance on civilians. Privacy laws, high costs and judicial authorizations required by the Criminal Code have largely kept police away from using the sort of big data analytics that have become increasingly common in the United States. Could Palantir help change that tide?

Outsourcing investigative work to a private company also raises real questions around investigative transparency.

At the same time, Khoo says, police have had the option of using Palantir software for years and have, generally, declined.

“I think it’ll be curious to watch what happens when they’re actually set up,” she says. “Canadian police forces have been keeping an eye on what’s happening in the United States.” Canadian police are risk averse, and the sort of civil liberties concerns presented by Palantir might not be worth it for them.

While Palantir may be the biggest of these secretive cyber companies to set up shop in Canada, it’s not the first — and likely won’t be the last.

UAE-based DarkMatter, which focuses on cybersecurity technology, opened an office in Toronto in 2016.

“We have assembled a world-class R&D team in Toronto and they now have cutting edge facilities from which to operate,” DarkMatter CEO Faisal Al Bannai said at the time. “I believe their efforts will be matched by those of the international experts we are attracting to the UAE, and together the teams will deliver a level of cyber security support that has never-before been experienced across geographies."

There are, of course, drawbacks to such international cooperation agreements.

While DarkMatter claims it does not do offensive cyber operations, extensive investigations from Reuters and The Intercept pointed strongly to the idea that the Dubai company was being used by the Emirati government to spy on its own citizens.

While having DarkMatter in Canada might seem like good news for the country’s emergent cybersecurity market, it underscores the fear of dual loyalties and digital skullduggery endemic to the trade.

Fears around Chinese mobile giant Huawei are emblematic of that worry. Western governments have struggled to weigh the possible advantage of more players in the cutthroat mobile tech market with the possible risks to cybersecurity and the threat of opening the door for Beijing to spy.

What remains to be seen is whether these companies can integrate in Canada and make it worthwhile for themselves, or whether Canadian nervousness around these kinds of new technologies will sour firms like Palantir from sticking around.

“Canada isn’t the United States,” Khoo says. “It’ll be interesting to see how much traction they get.”