Public pension funds in nearly half of U.S. states collectively hold billions of dollars in Palantir stock, bankrolling the data-mining company that powers the Immigration and Customs Enforcement agency’s mass-deportation machine.
Those investments have drawn protest from public employees in states like California, Maine, New Jersey, New York, and Oregon, whose retirement savings are tied to the company’s growing role supporting ICE’s immigration enforcement.
New research from the Purge Palantir campaign, shared with Sludge, shows that around 30 state-level pension funds hold Palantir shares, many of them worth hundreds of millions of dollars apiece—topped by the California Public Employees Retirement System (CalPERS), which holds nearly $734 million in shares. Purge Palantir, which includes the Quaker-founded American Friends Service Committee (AFSC) and the social justice group Mijente, calls on politicians to reject campaign money from the company’s PAC and executives and to halt its surveillance practices.
Palantir is expanding its business across federal agencies under the Trump administration as its CEO Alex Karp embraces President Trump and donates millions to his fundraising groups. Last year, it brought in more than half its revenue from government contracts. The company makes apps like ELITE used by ICE agents in neighborhood sweeps, practices challenged in court cases, as well as the $30 million ImmigrationOS AI system. With the DOGE team, Palantir also assembled a massive platform aggregating personal data with Internal Revenue Service records, a project criticized by civil liberties groups for furthering government overreach. Recently, Palantir’s Maven system is reportedly processing strike coordinates for the Pentagon’s missile attacks on Iran, including one that killed more than 175 people at a girls’ school.
Many of the states holding Palantir stock have adopted socially-responsible investing policies that present a stark contrast with their equity in the military contractor, whose CEO Karp recently valorized America’s “lethal capacities” and loudly defends the Trump administration’s immigration agenda. Sludge asked eight state pension funds how they reconcile their Palantir investment with their equivalents of Environmental, Social, and Governance (ESG) frameworks, citing their policies in areas like human rights and corporate governance. None of the eight funds said they were escalating their reviews of Palantir’s practices or considering divestment; only one, the New York State Common Retirement Fund (NYSCRF), said it was engaged with the company. It described divestment as “a last resort.”
Public employees in states including New Jersey and Oregon have pushed their investment funds to divest from Palantir, and in Maine, citizens spoke for five hours on the topic of a bill that would require the state pension system to divest from the company and others accused of human rights violations.
"Teachers and medical professionals who spend their days caring for community members are outraged that their pensions are being tied up in companies like Palantir,” said Kenny Morris, campaigns strategist for AFSC's Action Center for Corporate Accountability. “Pension funds that should someday care for them have their money invested in a company building AI surveillance systems that could be used to harm those same families or their loved ones.”
Palantir, whose co-founders include the billionaire investor Peter Thiel, has for years come under the scrutiny of investment industry watchdogs. In 2019, the Investor Alliance for Human Rights released a human rights briefing identifying a range of legal and reputational risks associated with the company. The following year, Amnesty International flagged the company’s high risk of contributing to “serious human rights violations” of immigrants and asylum-seekers.
More recent efforts to uncover information about Palantir’s human rights record have come from groups like the Congregation of the Sisters of St. Joseph of Peace (CSJP), which introduced a shareholder proposal asking for an impact report spanning the company’s work for ICE and federal agencies. Facing calls from public employees to divest from Palantir, pension funds generally cite an overarching fiduciary duty that prevents them from engaging with calls to drop a specific company like a weapons contractor—though in past years, some funds have divested from private prison companies and gun makers when confronted with human rights violations.
Meanwhile, Palantir’s political contributions are increasingly being seen as a liability by Democrats in Congress: several such lawmakers including Rep. Pat Ryan (D-N.Y.) have pledged to return Palantir executives’ donations in recent months and reject them going forward, and outside group attack ads are calling out candidates’ career ties to the MAGA-aligned company.
Palantir did not respond to a Sludge request for comment on how it would respond to requests from comptrollers, like one from New York City, for more information about its human rights impacts and corporate governance practices.
Surging Stock, With Some Skeptics
State pension funds hold billions of dollars in hundreds of stocks through passive index strategies that reflect the S&P 500's market capitalization—so as Palantir's stock price rises, more shares are likely acquired. Since its NASDAQ debut in 2020, Palantir's stock has more than doubled in each of the past three years, with Trump's 2024 election win triggering the bulk of its gains on expectations of a surge in federal contracts. Vice President JD Vance is a protégé and former employee of Thiel, and another Palantir co-founder, VC investor Joe Lonsdale, wears his MAGA affiliation on his sleeve.
The "Big Short" investor Michael Burry has argued that Palantir trades at nearly 100 times its expected future earnings—roughly five times the average software company—and that its cost accounting reveals a business closer to a consulting firm than a transformative software-as-a-service company, which would correct its stock price downward to $46 per share. Karp has pushed back, claiming that traditional valuation metrics "no longer apply" to Palantir's AI-powered operations. Meanwhile, Karp and Thiel have taken advantage of the stock's gains by unloading billions of dollars worth of shares through pre-scheduled trading plans, including around $1.4 billion that Karp sold in the weeks surrounding the 2024 election.
Citron Research’s Andrew Left, another short seller, compared Palantir’s price-to-sales ratio to that of OpenAI, which was valued at $500 billion last year. By that measure, OpenAI’s stock price would be 17x its sales—a high multiple, but not astronomical. Applying the same method to Palantir, the company’s $5.6 billion in revenue would place its stock’s value at around $40 per share—and that’s if Palantir roughly matched OpenAI’s performance in the market.
While many financial analysts still recommend the soaring stock as a buy, some investment industry researchers warn of "reputational risk" tied to Palantir's surveillance practices. Even a group of House Republicans last year sounded off about what happens when Palantir enables the government to merge datasets of Americans' personal information. Rep. Warren Davidson (R-Ohio) called the company's platform "dangerous" and said, "I hope to turn it off, fundamentally."
For pension funds to continue reaping gains from Palantir, the government contractor would need to avoid the downturns its investors' own guidelines identify as risks: human rights liabilities; governance shortcomings; and competition from AI services rolled out by giants like Amazon, Microsoft, and Google. Palantir also will see competition from AI rivals like Databricks and Snowflake, leading investment company RBC Capital to deem its stock price “unsustainable.”
California
CalPERS, the largest public pension fund in the nation with a market value of $560 billion in assets, adopted Governance & Sustainability Principles in 2023 with a number of areas that seem to disagree with its fortune in Palantir shares.
Under a section on Investor Rights, CalPERS recommends a “one-share/one-vote” principle, in which every share carries equal voting power. Palantir does not follow this model. When it went public in 2020, it adopted a three-tiered stock structure. Palantir Class A shares, available to ordinary investors, have 1 vote, Class B shares have 10 votes, and Class F shares (so named for “Founder”) give the three co-founders special voting powers to ensure that Chairman Peter Thiel, CEO Karp, and software engineer Stephen Cohen retain 49.999999% control of the company.
While for many companies the privileged shares become diluted when sold, Palantir’s Class F shares ensure that the trio control the company in perpetuity, even when they sell off Class A shares on the market. As Palantir’s annual SEC filing in 2024 put it, "This novel capital structure differs significantly from those of other companies that have dual or multiple class capital structures."
Several more CalPERS principles are strained by Palantir’s structure. Though its principles recommend independent boards that keep some distance from the CEO, Karp is both CEO and board member. While the fund supports governance proposals on artificial intelligence reporting, Palantir’s AI work for government and law enforcement clients remains secretive to the public, drawing criticism from digital rights groups like the Electronic Frontier Foundation. The document expresses “support for universal human rights” and espouses both political stability—sent haywire in Minnesota by ICE patrols—and civil liberties, a topic of legal challenges by the ACLU that focus on ICE and Customs and Border Protection (CBP) agents.
Abram Arredondo, CalPERS information officer, told Sludge, “CalPERS uses an index-oriented approach to invest in the totality of the public equities market. Consequently, we generally do not comment on individual holdings. CalPERS does engage our portfolio companies on environmental, social, and governance matters and when issues are identified we analyze the situation, gather relevant facts, and seek a resolution. In general, we also do not publicize our engagements with portfolio company leaders to preserve our ability to hold frank and open conversations with them.”
An August 2025 document from the fund argues that divestment from companies results in a less diversified portfolio, increasing volatility and losing money.
The California State Teachers Retirement System (CalSTRS) also holds nearly $624 million worth of Palantir stock as the fund has adopted a 2024 Investment Policy for Mitigating Environmental, Social, and Governance Risks. The policy recommends best practices in corporate governance, including “respect for human rights,” “respect for civil liberties,” and warns of companies whose products are “highly detrimental to human health so that it draws significant product liability lawsuits, government regulation, United Nations sanctions and focus, and avoidance by other institutional investors.”
Earlier this year, educators from Berkeley and other California residents traveled to Sacramento to raise the issue of their retirement funds’ investment in Palantir and other military contractors. “This seems to fly in the face of your ESG policy which claims that when making investments, CalSTRS considers whether or not a company industry makes a product that is highly detrimental to human health,” a retired school teacher said in public comments at CalSTRS’ Jan. 29 board meeting.
CalSTRS has a precedent in divesting on ESG grounds: in 2018, after a narrow vote, it divested its shares in private prison companies CoreCivic and GEO Group.
Thomas Lawrence, CalSTRS media relations manager, told Sludge, “Everything we do at CalSTRS is grounded in our mission to secure the financial future of California’s current and retired public school educators. We take a long-term view of investing to manage opportunities and risks across a global portfolio to ensure that we will provide benefits to our members now and in the future. We consistently follow our investment policies.”
New York
The New York State Common Retirement Fund (NYSCRF) holds over $413 million worth of Palantir stock, holdings that have broken through to political attention in recent years. The fund has put out an ESG Strategy Report (November 2024) and Stewardship Priorities (April 2025) document with sections out of alignment with Palantir in areas including human rights, diversity & inclusion, governance & accountability, and AI and cybersecurity. The New York State Teachers Retirement System (NYSTRS) also holds $326.5 million worth of PLTR shares.
Matt Sweeney, assistant communications director for the New York State comptroller’s office, told Sludge, “The Comptroller wrote to 22 companies with reported ICE-related contracts, including Amazon, Microsoft, and Palantir, seeking information on how each is addressing the risks associated with that work. We have heard back from or engaged with over half of those companies so far, including Palantir. We will consider next steps once we have a fuller picture of all the responses.”
Comptroller Thomas DiNapoli’s letter to Karp, sent on Jan. 23, sought more information on Palantir’s governance risks and internal controls, mentioning “greater clarity regarding the scope of services provided to ICE/DHS” and “managing potential human rights violations and reputational risks associated with ICE/DHS-related activities.” Previously, the comptroller’s office sent a December letter addressed to Palantir co-founder Stephen Cohen raising a shareholder proposal to disclose the company’s political spending, both supporting and opposing campaigns as well as influencing public opinion on elections or referendums.
“As investors we keep all options available, but divestment is a last resort and can only be pursued when there is a financial case consistent with the Comptroller’s fiduciary duty,” Sweeney said. “The Fund has a range of other engagement tools at its disposal well before divestment would be considered.”
The NYSCRF considers the Stewardship Priorities to be guidelines rather than a policy or compliance document, Sweeney said. He added, “Comptroller DiNapoli categorically condemns ICE’s ongoing terror campaign against immigrant communities. Virtually all major institutional investors, including New York state’s pension fund, the New York City pension systems, and the state teachers pension fund hold shares in Palantir and the other public companies with ICE contracts. Our shares are held in passive index funds, meaning the shares were not actively chosen. The state pension fund is managed by investment professionals for the exclusive benefit of its members. Divestment based on political beliefs would be a violation of state retirement law and fiduciary duty.”
DiNapoli faces two Democratic primary challengers this year, Raj Goyle and Drew Warshaw, both pledging to divest the state from its nine-figure Palantir stock holdings over its work with ICE enforcement. Goyle and Warshaw argue that the comptroller’s talk of engagement with Palantir is inadequate, and say that if the state’s Palantir holdings are in an index fund, that fund can be sold off and reinvested in ones that don’t include the ICE contractor.
