New Zealand markets open in 9 hours 50 minutes
  • NZX 50

    11,654.56
    +102.52 (+0.89%)
     
  • NZD/USD

    0.6351
    +0.0054 (+0.85%)
     
  • ALL ORDS

    7,554.00
    +73.30 (+0.98%)
     
  • OIL

    81.00
    +0.45 (+0.56%)
     
  • GOLD

    1,790.20
    +30.30 (+1.72%)
     

Peter Thiel’s Palantir Had Secret Plan to Crack UK’s NHS: ‘Buying Our Way In’

(Bloomberg) -- Palantir Technologies had a secret plan to deepen its relationship with the UK’s National Health Service without public scrutiny.

Most Read from Bloomberg

The US data-analytics company aimed to buy up smaller rivals that already had an existing relationship with the NHS, according to emails and strategy documents seen by Bloomberg. This approach would hopefully allow Palantir to avoid further scrutiny in working with one of the largest depositories of health data.

Palantir’s regional head Louis Mosley described the strategy in an email entitled “Buying our way in…!” sent in Sept. 2021, which outlined “hoovering up” small businesses serving the NHS to “take a lot of ground and take down a lot of political resistance.”

The NHS, one of the world’s largest employers with a recent annual budget close to £190 billion ($208 billion), has become a key client for Palantir. It hired the US tech firm to help with its Covid-19 response, and currently has a £360 million contract coming up for tender -- a deal Palantir is hoping to win.

While Palantir has so far been unsuccessful in buying up NHS suppliers, the documents seen by Bloomberg show how Palantir hopes to deepen its business with a key client, both by making key hires from the NHS and via potential acquisitions.

Palantir has consistently faced criticism in countries including the US and UK from civil liberties groups, who have been concerned by its track record for providing tools to government agencies that help enable broad surveillance of populations, for example by US Customs and Enforcement to find undocumented migrants for deportation. Lawmakers in the UK have also voiced concern over Palantir’s technology.

“Palantir exists to help the most important institutions solve their biggest challenges -- and there are none more important in the UK than the NHS,” Palantir spokesman Ben Mascall said in a statement. “Palantir has already enabled the NHS to improve millions of people’s lives. We want to do more of this and we make no apology for that.”

The spokesman added that some of the language from Mosley’s email was “regrettable” and “not an accurate characterization of our relationship with the NHS.”

Palantir’s spokesman said that the firm works with some of the most respected intelligence and defense agencies in the world, and these institutions continue to trust its software’s capability to protect sensitive data. They said the company was winning NHS business on merit and that its software was world-class and the result of several billion pounds of investment. Its website states that the company “was founded on the conviction that it’s essential to preserve fundamental principles of privacy and civil liberties while using data.”

NHS England spokesman James Kell said the upcoming contract would be awarded through an “open and transparent process” with strict requirements including “ensuring data remains secure and within the NHS.” Eighty-six suppliers attended pre-market engagement events, he said.

‘Start Scoping’

Co-founded in 2003 by Facebook Inc. board member Peter Thiel, Palantir quickly won the attention and financial backing of In-Q-Tel, the venture investing arm of the U.S. Central Intelligence Agency. The startup counted the CIA among its first customers, and cultivated an early reputation for secrecy.

Named for the all-seeing stones used in J.R.R. Tolkien’s fictional The Lord of the Rings trilogy, Palantir now counts dozens of US government agencies as customers, with a a significant number in the national security and defense space. Palantir leadership has forsworn doing business in China and other regions not aligned with US interests, elevating the importance of UK deals. However, despite predicting $1.9 billion in revenue for 2022, the firm has struggled to turn a profit. It’s share price is down about 56% so far this year.

According to Mosley’s email to colleagues, suitable UK takeover targets were those with credible leadership, annual revenue of between £5 million and £50 million, and already selling software services to the NHS. Founders would be offered a “v. generous buyout schedule (say 10x, especially if all stock),” he wrote.

Palantir would offer compensation to founders for their equity stake if they shifted all of their services into Palantir’s main data handling platform, Foundry, which was designed to organize data from disparate sources.

“I doubt anybody else is likely to come along and offer them something as generous as we would (we might even be their only real exit option),” Mosley wrote.

Early in the Covid-19 pandemic, Foundry was used by the NHS to track the take-up of vaccines and, more recently, to manage the backlog of patients waiting for elective surgeries. Since 2020, Palantir secured more than £37 million in contracts with the NHS and the Department of Health and Social Care, according to public spending tracker AdviceCloud.

One of the companies Palantir sought to acquire, shortly before Mosley emailed his plan, was Beautiful Information, an NHS-private partnership that generates real-time information for hospitals to use for balancing resources with patient demand. Palantir lost out to Canadian health-tech firm VitalHub Corp, which announced it bought Beautiful Information for £1.55 million in January.

“I’m keen to start scoping more acquisition targets like [Beautiful Information],” Mosley wrote, adding that he had “a kitty,” a British term for a pot of money.

Late in 2021, Palantir was also in advanced talks to invest more than £21 million into British data-analytics firm Sensyne, in a deal codenamed “Project Gondor” -- a reference to a fictional kingdom depicted in The Lord of the Rings -- in return for Sensyne using Palantir’s Foundry, according to an internal document seen by Bloomberg.

“There is nothing unusual about a company exploring investments or acquisitions,” Palantir’s spokesman said. He said the company had been approached with “two such opportunities” in 2021. “We declined to proceed with either and have not acquired any companies that work with the NHS,” he said.

Sensyne and Beautiful Information did not respond to requests for comment.

Palantir was also part of a group of several investors that contributed $230 million to support Babylon Holdings Ltd. going public in 2021, as part of a longer-term partnership between the two companies that saw Babylon migrate some of its data to Palantir’s Foundry platform, Bloomberg reported.

Lobby Efforts

Deals and takeovers were only part of Palantir’s approach, however, the messages seen by Bloomberg show. At the same time as the Babylon partnership, Palantir urged industry lobby group TechUK to encourage government agencies to buy commercial off-the-shelf products, such as Foundry, instead of building their own bespoke tools.

A spokeswoman from TechUK declined to comment.

Palantir hired Global Counsel -- the strategic advisory firm co-founded by Peter Mandelson, a British Lord and former leading adviser to ex-Prime Minister Tony Blair -- to help lobby UK government. It also recently hired Indra Joshi and Harjeet Dhaliwal, key figures from the NHS.

“Global Counsel’s work for Palantir is a matter of public record,” a spokesperson said in an emailed statement. “The relevant declarations to statutory registers and the NHS in relation to this work have been made.”

Critics have challenged the NHS’s lack of transparency over hastily executed deals during the pandemic. Palantir was paid a nominal £1 fee in March 2020 to run a Covid-19 data store to help the NHS allocate resources more efficiently, but has used the work as a case study in pitches for other NHS contracts, according to two senior NHS officials who were not authorized to speak to the media.

Ahead of that deal, Palantir spent months wooing NHS chiefs, the Bureau of Investigative Journalism reported in February 2021. In December 2020, Palantir was granted a new contract to continue the data-store work in a £23.5 million deal that was not subject to a public tender process.

Palantir declined to comment, but NHS England said in a statement at the time that it had “always acted in accordance with its legal responsibilities.”

Despite hiring Global Counsel, Palantir received criticism from lawmakers over their deepening relationship with the NHS.

“Patient trust is vital to our NHS, so foreign tech companies such as Palantir, with their history of supporting mass surveillance, assisting in drone strikes, immigration raids and predictive policing, must not be placed at the heart of our NHS,” British lawmaker David Davis, a member of the Conservative Party and former Secretary of State for Exiting the European Union, said during a House of Commons debate in June 2021.

Independent media company OpenDemocracy sued the UK government with the support of legal nonprofit Foxglove for awarding business to Palantir without a public tender process. The government agreed not to extend the contract beyond Covid without a public consultation. The push-back continued in Sept. 2021, when the Department of Health and Social Care ended another data deal with Palantir, Bloomberg reported.

Cori Crider, founding director of Foxglove, said there are “real concerns” about whether Palantir offers the NHS value for money, “or whether there is just a ‘shiny dashboard’ thinking infecting some officials.”

It’s not known when the NHS will make a decision for its upcoming £360 million tender. Other potential bidders include major consulting firms as well as large US tech companies.

“Foundry as a piece of software is entirely competent,” said Phil Booth, coordinator of British data-privacy campaign organization medConfidential, adding that he did not have concerns about unauthorized people accessing patient data as that would be “suicidal” for Foundry.

However, he said that Palantir’s history as a “Peter Thiel-backed, CIA-initiated company” could deter patients from sharing their data. “We should get rid of Palantir and build our own open-source software,” he said.

Most Read from Bloomberg Businessweek

©2022 Bloomberg L.P.