Palantir’s Chief Technical Officer, Initially the 13th Staff Member, Emerges as a Stealth Asset for Silicon Valley Defense Tech Startups

On a sunny day, August the 5th, Palantir’s Chief Technology Officer, Shyam Sankar, addressed a group of about 20 eager newcomers in their Washington, D.C., office. His message encompassed the usual – the firm’s mission, its legacy, and so forth. However, one segment stood out, particularly because it would have been almost inconceivable just a few years ago: Sankar’s promotion of emerging defense technology startups fostered by veterans of Palantir, Tesla, and SpaceX.

The message carried a weight that was less about economics and more about shared ideology. Palantir’s interests in startup collaborations are a drop in the ocean compared to their governmental dealings. Yet, the value of aligning with ideologically similar entities is immeasurable.

Palantir prides itself on diverging from the typical public company ethos—eschewing the buttoned-up appearance for a remembrance of its more unrestrained private company days. Sankar concluded the orientation by humorously inviting the fresh recruits to tell him to “f–k off,” a practice he believes fosters an egalitarian atmosphere. Exiting the meeting room, he strolled past a sign dubbing the employees as “founders” and “trailblazers.”

This designation is apt: Sankar, with over 18 years at Palantir, is intent on steering the company to become a cornerstone for defense technology startups. This sector has seen an infusion of over $129.3 billion in venture capital since 2021, reports PitchBook.

“It injects a tremendous amount of vitality internally for us as we lay the foundations for entities like Apex Space and Castelion, startups birthed by those hailing from Tesla and SpaceX,” he noted.

Hence, in late 2023, he inaugurated First Breakfast, a program that equips defense tech startups with mentorship and resources, which he describes—in his reviews—as Palantir’s own “Amazon.com to AWS moment.” It’s a business and philosophical strategy to foster the growth of future industry leaders. Sankar dedicates numerous hours each week consulting with these startups and their investors.

Much like Palantir CEO Alex Karp, Sankar often reflects on safeguarding Western principles and laments the decline of America’s industrial might post-World War II. From a conference room, against the backdrop of air traffic over the Potomac, he shared his grave concerns that America might not be prepared for potential future conflicts.

“The starting point is the acknowledgment that victory isn’t guaranteed,” he asserted.

He sees Palantir’s role as pivotal in ensuring “the country and the West emerge victorious,” emphasizing the critical need for the success of similar companies in analyzing data for governments and businesses.

Catalyzing a Defense Tech Revolution

Sankar’s path to Silicon Valley seemed predestined in 2004 as he pursued a master’s in management science and engineering at Stanford, embraced wellness trends, and exhibited a rigorous work ethic. Kevin Hartz, Sankar’s initial employer post-graduation and co-founder of Eventbrite, characterized him as the consummate overachiever. Sankar’s stint as the fifth employee at Xoom saw him expanding the company globally.

Despite his global success, by 2006, Sankar felt called to Washington, D.C. “Shyam always had a loftier goal,” Hartz remarked, noting how Sankar’s shift in focus wasn’t surprising given his purpose-driven nature.

Joining Palantir as its 13th member, Sankar entered at a time when the Valley hadn’t yet turned its back on government-related ventures. Despite skepticism from investors, the team’s bold demeanor initially hindered but later benefited from an investment and advisement by In-Q-Tel, a CIA-associated venture group. Palantir’s journey includes significant government contracts, like the $480 million deal with Project Maven, amidst scrutiny over its ICE collaborations and broader privacy concerns.

Palantir’s influence has extended beyond its immediate scope, seeding an ecosystem of defense tech ventures. With financing from Palantir co-founder Joe Lonsdale’s 8VC, and former employees founding companies like Anduril, valued at $14 billion, the industry is burgeoning. Moreover, ex-Anduril staff are founding critical new enterprises, such as Saronic Technologies and Wraithwatch.

As the sector expands, so do Sankar’s concerns about U.S. military readiness. He paraphrases a military officer’s warning: “The military we have today is what we’ll be using in 2032.” This, to Sankar, spells potential disaster not just for the military but for any business operating with outdated infrastructure.

First Breakfast: Cultivating Success

Sankar has publicized various ambitious initiatives, including establishing a military reserve for tech leaders and advocating for the Department of Defense to adopt a more venture-capitalist attitude towards contractors. His primary vehicle for these ideas is First Breakfast, named in contrast to the “Last Supper” defense industry consolidation in 1993. It provides startups with access to software tools and support systems aiming to simplify the cumbersome governmental approval process, hence accelerating their journey to securing contracts.

Among its offerings is FedStart, a program enabling startups to build atop Palantir’s accredited platforms, considerably easing the initial stages of government contract qualification. While Palantir charges for FedStart, Sankar assures it’s at cost. First Breakfast also facilitates access to military data through secure APIs, a boon as mentioned by Rebellion Defense CEO Ben FitzGerald for its time and complexity savings.

Despite serving as a strategic business move for Palantir, as noted by Ross Fubini of XYZ Venture Capital, Sankar’s initiatives aren’t solely driven by profit. They aim to enhance government and social stability by growing the ecosystem. Sankar believes that for the defense tech sector to thrive, startups must find viable exits, suggesting that acquisitions by industry giants could be one pathway, despite current disinterest from these ‘prime’ companies.

While nurturing the defense tech ecosystem presents long-term challenges, immediate efforts like First Breakfast pave the way. Sankar humorously contemplates adding a literal breakfast event to his program, quipping about the tech sector’s notorious late risers.