BUSINESS

There's A Fight Brewing Between The NYPD And Silicon

By William Alden
Posted on June 28, 2017, at 3:23 p.m. ET

Matt Chase for BuzzFeed News

A showdown over law enforcement information — and who controls it — is taking place between
the New York Police Department and Palantir Technologies, the $20 billion Silicon Valley startup
that for years has analyzed data for New York City's cops, BuzzFeed News has learned.

The NYPD is canceling its Palantir contract and intends to stop using the software by the end of this
week, according to three people familiar with the matter who weren't authorized to speak publicly.
The department has created a new system to replace Palantir, and it wants to transfer the analysis
generated by Palantir’s software to the new system. But Palantir, the NYPD claims, has not produced
the full analysis in a standardized format — one that would work with the new software — despite
multiple requests from the police department in recent months.

Lawyers from each side have gotten involved, showing that this dispute — which hasn’t previously
been reported — has the potential to escalate into a legal fight. And given the work Palantir does for
a host of other government clients, the standoff over a seemingly arcane technical issue has
implications for a range of services, from international espionage to battlefield intelligence.

Palantir has insisted to the NYPD that it is cooperating with the police department's requests, while
the NYPD maintains that it has still not received the information that it is owed, two people familiar
with the matter said. In a statement to BuzzFeed News, a Palantir spokesperson said, "Palantir is an
open platform. As with all of our customers, their data and analysis are available to them at all times
in an open and nonproprietary format."

The Palantir spokesperson also sent BuzzFeed News a statement from David Cohen, a former NYPD
deputy commissioner of intelligence who currently receives a stipend from Palantir — and who left
the NYPD at the end of 2013, before the department changed the way it purchases and manages
technology contracts. The statement said, "Palantir remains an instrumental system for NYPD and
has played a key role in enabling NYPD to identify and prevent terrorist attacks."

A spokesperson for the NYPD declined to comment.

The NYPD has been a Palantir customer since at least 2012, and Palantir has touted the relationship
to help it drum up other business. The software ingests arrest records, license-plate reads, parking
tickets, and more, and then graphs this data in a way that can reveal connections among crimes and
people. In late 2014, for example, the police department used Palantir's analysis to plan a sting that
landed the rapper Bobby Shmurda behind bars, just as his career was taking off, according to an
internal Palantir email seen by BuzzFeed News.
Bobby Shmurda at the Barclays Center in Brooklyn in Oct. 2014.
Neilson Barnard / Getty Images

The NYPD quietly began work last summer on its replacement data system, and in February it
announced internally that it would cancel its Palantir contract and switch to the new system by the
beginning of July, according to three people familiar with the matter. The new system, named
Cobalt, is a group of IBM products tied together with NYPD-created software. The police department
believes Cobalt is cheaper and more intuitive than Palantir, and prizes the greater degree of control
it has over this system.

The NYPD was paying Palantir $3.5 million a year as of 2015, according to an internal Palantir email
that describes a contract to be signed in late 2014. Other Palantir customers — including Home
Depot, which canceled late last year — have also raised concerns about Palantir’s prices.

The emerging dispute is not over the data that the NYPD has fed into Palantir's software, but over
the analysis that the software has produced — all the insights like the one that underpinned the
Shmurda arrest.

The NYPD asked Palantir in February for a copy of this analysis, and for a translation key so that it
could put the analysis into its Cobalt system, the people familiar with the matter said. But when
Palantir delivered a file in May, it declined to provide a way to translate it, arguing that doing so
would require exposing its intellectual property, the people said.

The NYPD then asked Palantir for the information in a translated format — asking Palantir to do the
translation itself — according to the people. Palantir responded this month, providing a file that was
indeed readable. But according to the NYPD’s examination of the file, it contained only the original
data the NYPD had fed into the system, the people said. The analysis appeared to be missing.

If the dispute is not resolved by the end of this week, the NYPD can continue to view the analysis by
using Palantir software, given that customers retain a perpetual software license even after
canceling, two people familiar with the matter said. But this could mean having to switch between
systems to see information relating to a case, a situation the NYPD wants to avoid. Plus, as an ex-
customer, the NYPD will not have access to the same product upgrades or support should the
software fail.

The standoff highlights a thorny issue for companies and governments that outsource their data-
mining tasks to outside contractors. Technology experts say software companies have little
incentive to smooth a customer’s transition to a rival’s product. In some situations, a software
company would genuinely risk devaluing its intellectual property if it shared information with a
customer, since that could show the customer how the information was created, according to Tal
Klein, chief marketing officer of IT monitoring company Lakeside Software.

"This notion of how portable your data is when you engage in a contract with a platform is really,
really complex, and hasn’t really been tested," Klein told BuzzFeed News. "Nobody really wants to
talk about it, especially not in the Valley. We always want to believe that the web and the cloud make
everything portable."

Palantir was founded in 2004 by a group that included Peter Thiel, the billionaire venture capitalist
who supported President Donald Trump's campaign and is now the president’s closest link to Silicon
Valley. Palantir does significant business in Washington, working for the CIA, the FBI, the Marine
Corps, and the military's Special Operations Command. It successfully sued the Army last year in an
effort to be considered for a battlefield intelligence contract. In the corporate sphere, it counts
companies such as BP and Walmart among its customers.

Palantir has viewed the NYPD relationship as an important feather in its cap. Last year, on a trip to
New York, chief information officers of federal civilian agencies saw a Palantir product demo at the
police department, according to a person familiar with the matter. Palantir insiders have also cited
the NYPD, as well as the Los Angeles Police Department, another client, in conversations with
prospective customers, emails show.

But Palantir, which sends its "forward deployed engineers" to customer offices, has had a skeletal
staff working on the NYPD account in recent years, far fewer than at the LAPD, according to two
people familiar with the matter. Internal Palantir emails show that the startup sometimes faced
skeptics inside the NYPD, including Chief of Detectives Robert Boyce, who gained increased
authority last year.

Boyce saw Palantir as "a cool tool, but that's about it," a Palantir staffer told colleagues in 2015.

Palantir has struggled to expand its work with the police force, the emails show. As of March and
April 2015, Palantir had had "little exposure to the top brass," and although it wanted to add more
business, "the door there clearly still remains closed given the larger political environment," staffers
wrote in emails.

A staffer at one point invoked a phrase popularized by Thiel, author of Zero to One: Notes on
Startups, or How to Build the Future, saying that Palantir still needed to get "from 0->1 at NYPD." ●

William Alden is a business reporter for BuzzFeed News and is based in Los Angeles.

Contact William Alden at will.alden@buzzfeed.com.

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