The low point in Palantir’s very first quest for investors came during a pitch meeting in 2004 that CEO Alex Karp and some colleagues had with Sequoia Capital, which was arguably the most influential Silicon Valley VC firm. Sequoia had been an early investor in PayPal; its best-known partner, Michael Moritz, sat on the company’s board and was close to PayPal founder Peter Thiel, who had recently launched Palantir. But Sequoia proved no more receptive to Palantir than any of the other VCs that Karp and his team visited; according to Karp, Moritz spent most of the meeting absentmindedly doodling in his notepad.

Karp didn’t say anything at the time, but later wished that he had. “I should have told him to go fuck himself,” he says, referring to Moritz. But it wasn’t just Moritz who provoked Karp’s ire: the VC community’s lack of enthusiasm for Palantir made Karp contemptuous of professional investors in general. It became a grudge that he nurtured for years after.

From The Philosopher in the Valley: Alex Karp, Palantir, and the Rise of the Surveillance State by Michael Steinberger. Copyright © 2025. Reprinted by permission of Avid Reader Press, an Imprint of Simon & Schuster Inc.

But the meetings on Sand Hill Road weren’t entirely fruitless. After listening to Karp’s pitch and politely declining to put any money into Palantir, a partner with one venture capital firm had a suggestion: if Palantir was really intent on working with the government, it could reach out to In-Q-Tel, the CIA’s venture capital arm. In-Q-Tel had been started a few years earlier, in 1999 (the name was a playful reference to “Q,” the technology guru in James Bond films). CIA Director George Tenet believed that establishing a quasi-public venture capital fund through which the agency could incubate start-ups would help ensure that the U.S. intelligence community retained a technological edge.

The CIA had been created in 1947 for the purpose of preventing another Pearl Harbor, and a half century on, its primary mission was still to prevent attacks on American soil. Two years after In-Q-Tel was founded, the country experienced another Pearl Harbor, the 9 ⁄ 11 terrorist attacks, a humiliating intelligence failure for the CIA and Tenet. At the time, In-Q-Tel was working out of a Virginia office complex known, ironically, as the Rosslyn Twin Towers, and from the twenty-ninth-floor office, employees had an unobstructed view of the burning Pentagon.

In-Q-Tel’s CEO was Gilman Louie, who had worked as a video game designer before being recruited by Tenet (Louie specialized in flight simulators; his were so realistic that they were used to help train Air National Guard pilots). Ordinarily, Louie did not take part in pitch meetings; he let his deputies do the initial screening. But because Thiel was involved, he made an exception for Palantir and sat in on its first meeting with In-Q-Tel.

What Karp and the other Palantirians didn’t know when they visited In-Q-Tel was that the CIA was in the market for new data analytics technology. At the time, the agency was mainly using a program called Analyst’s Notebook, which was manufactured by i2, a British company. According to Louie, Analyst’s Notebook had a good interface but had certain deficiencies when it came to data processing that limited its utility.