How Peter Thiel & Alex Karp’s Secret Weapon Is Rewiring Modern Warfare

Peter Thiel has always had a thing for mythical objects of power. Twenty years ago, he named his new company after the all-seeing orbs from Lord of the Rings – the palantíri, magical stones that could reveal distant lands and future events to their wielders. Today, in a world where fantasy has collided with reality, Palantir Technologies might just have created something equally powerful: artificial intelligence that thinks like a soldier.

Peter Thiel has always had a thing for mythical objects of power. Twenty years ago, he named his new company after the all-seeing orbs from Lord of the Rings – the palantíri, magical stones that could reveal distant lands and future events to their wielders. Today, in a world where fantasy has collided with reality, Palantir Technologies might just have created something equally powerful: artificial intelligence that thinks like a soldier.

The story begins, as many Silicon Valley tales do, in the aftermath of PayPal’s $1.5 billion sale to eBay. While his contemporaries were busy launching social networks and photo-sharing apps, Thiel had a different vision. In 2003, alongside Alex Karp, Joe Lonsdale, Stephen Cohen, and Nathan Gettings, he set out to build something that would make Tolkien’s seeing-stones look like child’s play.

“Peter always understood that data would be the oil of the 21st century,” says a former PayPal executive who worked closely with Thiel (speaking on condition of anonymity). “But he wasn’t interested in helping people share cat videos. He wanted to solve the hard problems – terrorism, financial fraud, human trafficking.”

Fast forward to 2024, and Palantir has become exactly what Thiel envisioned: a digital oracle for the modern age. The company that helped track down Osama bin Laden is now a member of the S&P 500, with a market cap that makes its early skeptics look foolish. But its latest contract – a $99.2 million deal with the U.S. Army – might be its most ambitious yet.

The goal? Teaching machines to think like soldiers. Not replace them – understand them.

In the sterile hallways of the Army Contracting Command in Adelphi, Maryland, this probably sounds like just another procurement decision. But for those who understand Thiel’s long game, it’s the culmination of a twenty-year vision. Palantir has always been about augmenting human intelligence, not replacing it. This new contract, focused on “user-centered machine learning,” is Thiel’s philosophy made manifest.

The timing couldn’t be more significant. After achieving its first profitable year in 2023, Palantir has been quietly revolutionizing how organizations handle data. Its Artificial Intelligence Platform (AIP) has already turned heads in the tech world. But this Army contract? This is different. This is about creating AI that can operate in the fog of war.

The contract’s five-year timeline speaks to its ambition. While other tech companies measure success in quarterly earnings, Palantir – true to Thiel’s contrarian nature – is playing the long game. They’re settling in for a marathon effort to fundamentally reshape how humans and machines work together in life-or-death situations.

But this isn’t just about military applications. The technologies being developed under this contract could revolutionize everything from disaster response to pandemic management. Palantir has already proven its worth in these areas, helping track COVID-19’s spread and assisting humanitarian organizations in crisis zones.

Of course, not everyone is comfortable with this merger of Silicon Valley and the military-industrial complex. While companies like Google have backed away from defense contracts amid employee protests, Palantir – under the leadership of CEO Alex Karp – has leaned into them. It’s a stance that perfectly aligns with Thiel’s belief that tech companies have a patriotic duty to support national defense.

The implications stretch far beyond the battlefield. When you teach a machine to understand human decision-making under pressure, you’re not just building better military software – you’re potentially revolutionizing how humans and machines interact in any high-stakes situation.

As the sun sets over the Pentagon, somewhere Peter Thiel might be allowing himself a small smile. Twenty years after naming his company after magical seeing-stones, he’s built something that might be even more powerful: AI that doesn’t just process data, but understands the humans who use it.

The palantíri of Tolkien’s world showed visions of distant lands and times. Thiel’s Palantir might just have created something more valuable: a way to see into the future of human-machine collaboration itself.

Welcome to the next chapter of warfare. The generals are algorithms, the battlefield is everywhere, and the company that started with a fantasy name might just have created something magical after all.