Palantir Moves Headquarters to Denver from Silicon Valley | Hacker News Reader

Palantir Moves Headquarters to Denver from Silicon Valley

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This feels on-brand after they used their S-1 to complain about Silicon Valley "elites."

> The engineering elite of Silicon Valley may know more than most about building software. But they do not know more about how society should be organized or what justice requires.

Presumably Denver elites know what justice requires.

Or that Silicon Valley has no intrinsic advantage, and that they no longer have to factor it in where they are physically situated. Denver probably came out on top because they think it affords a better quality of life for their employees and possibly more favorable tax regime.

In one of Paul Graham's early essays [1], he talks about cities and ambition, and how each city sends a message to its inhabitants by virtue of the cluster of people who live there or aspire to be there (and have ended up there).

I'm just wondering: what is Denver's message? Is it similar to Utah's where a slew of successful software companies got started? [2] Or has the city's message become unimportant in the era of remote work?

I ask because it is often the case in history that great work is done in places that are the least comfortable.

[1] http://www.paulgraham.com/cities.html

[2] https://en.wikipedia.org/wiki/Silicon_Slopes

>I'm just wondering: what is Denver's message

"I made my money, screw you"

It's like the Florida or Vermont of the west only it's SV types who cash out and move there to raise kids or retire instead of the Wall St crowd.

A lot of us aren't against taxes. We're against unreasonable levels of taxation and governance that squanders the taxes it does collect. California is the taxation equivalent of a loan shark.

I now live in a state where I pay lower taxes and that provides more and better services than California. In fact, I can't think of a single thing California does better. I'm happy to pay my taxes here as this state's government does a much better job with the tax revenue they do collect.

Sadly, as more Californians come to my state, they are supporting a lot of the same bad policy decisions that were well-intentioned but ultimately ended up becoming problematic in California.

I didn't say anything about taxes and FWIW I agree with you. I meant it more of a "and now I'm coming here to raise your cost of living and tell you how to do things" sort of way.

Kinda funny (in a sad sort of way) that in a thread about California people assume that "I've made my money, screw you" is about dodging taxes because that implies things about where the Overton window is in CA and is illustrative about why people might not like a bunch of Californians with enough money to matter (the last part being key) showing up over a couple decades.

We understand, and it's clearly about politics. After all, taxation levels and government spending are nothing if not political. And that's fine, everyone is free to move around and find the place that works for them given their preferences and constraints. Everyone is better off if they find a place where they are happy.

However, you can't deny or bemoan the freedom of others to do the same as you did, and to be political in the same way.

Great essay. I would say the game has certainly changed quite a bit with regards to remote work. I still don't feel the same energy working remote as I do in a room filled with people passionate about solving an exciting problem (i.e. a traditional startup). I think remote favors building "bazaar-type" software but not "cathedral-type" software or technology.

We're currently in a big state of flux. The character of many cities is shifting. Many folks are betting that NYC will not recover from this remote-working trend and economic downturn, for example. Are the skeptics right, or is this a short-term bump in the road?

Millions are moving from certain states and cities right now. How will this migration shape the character of destination cities like Denver? I'd say that's the more important question to speculate on rather than look back at what Denver has been in the past. I do think when you move to a place, it shapes you and you in turn shape it. It's a give and a take.

Colorado in general has a ton of defense contractors. It's probably easier to find talent that has the necessary clearances and experience working with government agencies there versus in the bay.

Anyone know why Colorado comes out over other states on those terms?

300 days of sun still, but a government strangled by a libertarian amendment to the state constitution that keeps us from being able to continue owning our roads?

https://en.wikipedia.org/wiki/Taxpayer_Bill_of_Rights

Peter Thiel is the guy that's so libertarian he wrote about how extending the franchise to women was a mistake.

> …I no longer believe that freedom and democracy are compatible… The 1920s were the last decade in American history during which one could be genuinely optimistic about politics. Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women—two constituencies that are notoriously tough for libertarians—have rendered the notion of "capitalist democracy" into an oxymoron.

So I can see how that would appeal to him.

Taxpayers don’t own public roads, they rent them.

And now we're renting them to both the government and Goldman Sachs, on a fifty year deal that Goldman Sachs turned a profit on after five years.

And you want to give the geniuses who signed that deal even more money to spend?

I want them to be constrained by a public process with weigh in from the public when they sell off public works.

I also want them to not be so backed into a corner from a funding perspective that something like that looks like a good idea. This is a pretty good example of "it's expensive to be poor". Apparently CDOT wasn't going to have enough money for plows that year without an injection of money, and the investors' negotiators knew they had CDOT over a barrel. For an example of how much that would destroy the city's economy, we already have had several inches of snow this year (even with the wild fires going).

This idea of they're not doing well so cut their money leads to paying 80% on a project that's supposed to last fifty years, and then another 80% ten years later and so forth. Then you're left without enough money for basic infrastructure.

As someone else mentioned, one reason is it's cheaper...for now. The "for now" is key. Having lived in Denver for more than 10 years, our housing and costs of living are growing incredibly quickly (relative to the Bay Area at least). Our total housing costs are definitely not in the same ballpark as the Bay, but we're creeping up on L.A. levels.

Add to that a good quality of life for employees (low pollution, the outdoors, etc), as well as an abundance of talent, and a city (or three) that's been very focused on nurturing its tech/startup community for the past 10 years (including Denver Startup Week, the largest free startup-focused event in the world)...and it's a no-brainer.

TBH, one of the biggest recent macro-challenges for Denver is the sheer number of people moving here, a large portion of which are from California.

>TBH, one of the biggest recent macro-challenges for Denver is the sheer number of people moving here, a large portion of which are from California.

If the goal is to get the hell away from CA culture and SV engineering mindset wouldn't somewhere else be a better fit? I get the attractiveness of Denver relative to CA at present but if you're playing a long game that's like trading in your ticket on the Titanic for one on the Lusitania.

The goal is probably getting away from the high taxes but still remain in a place with low humidity, mild weather, access to nice mountains, and a socially liberal government.

Agreed. My family has actually looked at moving away from Denver, with all the influx of people. The cost of living is no longer as attractive, and the politics that are coming in from out-of-state are much more slanted. I moved away from California 10+ years ago - now it seems like a lot more are doing the same thing, but bringing the same things with them that has made California less attractive.

That being said, as someone else mentioned, if your goal is to escape high taxes and the super-expensive housing costs of SF, all while living in an area that supports your life outside the office, Denver is a good place to look at. Even if its cost of living is rising.

>I moved away from California 10+ years ago - now it seems like a lot more are doing the same thing, but bringing the same things with them that has made California less attractive.

And people who did that were the incremental change that enable the people who you think are changing it for the worse to feel like moving there and doing that is a good idea.

Sure that boutique deli that you and your neighbors keep in business (or local law you voted for, or whatever, doesn't matter what it is, just some small seemingly non-meaningful change) doesn't really matter individually but all these little things at the margin add up to a big difference.

It's like how the presence of ethnic neighborhoods furthers immigration from whatever that source country because potential migrants know they have a turnkey place to fit in (though I consider people migrating into a position to economic disadvantage to be fundamentally different than people migrating into a position of economic advantage).

I'm not picking on you. You're just one person. One person doesn't matter. It's the larger mechanism of migration that I'm trying to describe here. Basically don't blame the new migrants. People like doing what you did are why people like them moved in.

Legal weed?

There are LOTS of defense companies there. You'll probably find it easier to hire and find talent when you're in a defense hub (your employees will need clearances and stuff to be able to do work for the DoD).

Those are excellent reasons to move to another area. I think that relocating to other areas makes fantastic sense for lots of companies, Palantir included. My point, though, was that Palantir went out of their way to rail against the values and culture of Silicon Valley in their S-1. Repeatedly. These are all quotes from their S-1:

> Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments.

> Our roots in the intelligence community and defense sector introduced us to unique demands that many companies in Silicon Valley and elsewhere did not address: security, stability, and transparency

> Palantir was founded on the premise that the most critical challenges cannot be solved from the comforts of Silicon Valley.

This all makes more sense now that we know they were planning to move shortly, but it still struck me as weird and political. It read to me like "Remember, US government, we don't get wishy washy about using technology for military purposes like some of those other, differently-valued companies."

> Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments.

They didn’t have to go all the way to denver: just leave the valley for San Francisco Which is full of companies that share palantir’s philosophy of never making a profit.

Colorado is home to Lockheed Martin, one of the largest US defense contractors. Sounds like a solid culture fit for Palantir.

Lockheed Martin was based in Bethesda, MD last time I checked.

They have a big operation south of Denver.

And has offices for Northrop Grumman, L3Harris, Raytheon, United Launch Alliance, Boeing, Intelsat, etc

> Our roots in the intelligence community and defense sector introduced us to unique demands that many companies in Silicon Valley and elsewhere did not address: security, stability, and transparency

The absolute laughability of anything around Palantir being associated with "transparency".

Or perhaps their "demands" around transparency were "we want nothing to do with it".

> Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments.

I mean, looking at their line of work and what they're doing with technologies such as image-recognition, and the contracts they seem to be getting, I agree. Anecdotally, whenever they come up in conversation here in the Bay people seem to not like them very much.

> Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments.

I think this point is basically about how Palantir have had generally hard time hiring in SV. People don't align with their values or generally want to work for companies that build tech for government agencies.

The personal income tax rate in CO is 4.63%, and in CA it tops out over 13%. The executives who are going to be selling stock in the next couple years will save nearly 10% in taxes if they relocate to CO.

The CA FTB will likely go after some of them, on the grounds that they "earned" the stock/options while living in CA. In my prior life as a tax lawyer, I saw the FTB get beaten on this, but they probably still pursue the cases because there's so much money at stake.

I know someone who knows someone who had a big exit recently and he said he moved and because of the tax situation, he's unlikely to even visit California for a few years, is there anything about the law that protects someone if they never return to the state, or is that bs?

Good chance they don't want to come back for other reasons I guess!

It wouldn't matter if he came back to visit. It's more important that he change his driver's license, voter registration, move his family, bring his pets, not own real estate here, etc.

The state's theory (that I recall) doesn't relate to future visits to CA — it's all about what happened in the past.

BTW, I'm happy to make a referral to anyone who ends up targeted by the FTB on this issue. My former colleague, who is still a tax lawyer, nailed the FTB in court when they went after one of his clients on this.

Thanks for the answer, and the referral offer - I doubt my SV lottery tickets will ever win, and I'm staying in CA anyways, but maybe a friend might need help one day.

"Residency" is based on what fraction of your time you spend in the state. It's easier to make a case that you're not a resident if you can say "Wait a minute, I haven't even set foot in the state of California in the last 2 years!" It's not that it's a hard & fast rule or loophole, it's that the law is one of those things that includes some discretion & wiggle-room, and you're less likely to be on the wrong side of the FTB & court's interpretation of it if there are facts you can point to that clearly suggest "not a resident".

Ah that makes sense, sounds like it's just a cover your ass element, especially if you accidentally left some other loose end about.

There may be a 10 year retroactive wealth tax coming soon and that is sure to scare a lot of wealthy people away.

It's important to have a _very_ clean severing of ties with CA: https://www.ftb.ca.gov/forms/2018/18_1031.pdf

Can you provide details on what legal arguments were used to beat the CA FTB?

It's been a while, and I was never a state tax guy (fed/intl for me). I imagine the theory is based on how states divvy up income between them.

Imagine you move from CA to CO, and in 2021 you live entirely in CO. Well, CO is going to say anything you earned during 2021 is fully theirs to tax. So if you sell $10M of stock, they'll want their 4%. But if CA says they want 13% of your $10M, on the grounds that you "earned" it while living in CA, then that's not fair to you.

Why isn't it fair to you?

Usually the laws are such that you pay the max, not the sum, of the two state taxes.

Well in theory you'd pay the max of two states that you legitimately owe taxes to. But if one state that you should not owe taxes to decides to assess you, the other state (CO in my example) would not just roll over and give up their revenue.

So instead you get handed two separate tax bills (and post 2018, you can't deduct more than $10k in SALT, making this hurt even more).

I think one of us is misunderstanding something. If CA and CO both claim you owe them money, you pay the value to CO, and then you only owe the difference to CA, so the most state tax you pay is 13%. CO gets 4% and CA gets 13-4%=9%. I've filed my taxes split between CA and another state before and that's what you do.

If CA comes after you for not filing taxes, you may owe fines, but you can still deduct other state tax when filing CA state taxes. SALT isn't relevant.

Like to give an example, if I found a startup in SV, and run it their for 5 years, move to Denver and go public and cash in my options as a CO resident, I'd argue that most of that money was earned while in CA. California enforcing that doesn't seem unfair as long as they treat it the same as any other income (allow you to deduct other state tax)

It sounds like you are taking the position of the CA taxing authorities, who have lost in court on this point. You're welcome to do so (with your own money!), but other CA taxpayers would be wise to embrace the courts' position.

I asked why it would be unfair, not what the legality was.

Ah, I thought fairness meant in the current legal system. If there were different laws it would be different.

But even with your example, imagine starting a company in CA, having remote engineers around the world building your company, and then having all of your gains taxed in CA when you later sold the company (but no longer lived there). Why would that be fair? What if you sold it 5 or 10 or 20 years after leaving? Part of the reason we don’t let CA tax you after you leave is because doing so opens up a can of slippery slopes, to mix metaphors.

"on-brand" or could it arguably be some truth to it?

The lack of diversity in SV is stark, and there is pretty clear that they have grown disconnected with a lot of people who work in the world of atoms.

It's crazy that today nearly everything is political, even an S-1 filing.

I think it always was, but those being taken advantage of never had the voice to respond.

On another hand, S-1 might be the last good chance to shake some of the crazy out. It’s hard to imagine that kind of needless inflammatory language in a 10-K

Denver elites are mostly just SV elites who have cashed out. But of course they don't see themselves that way.

Try Saudi Arabia. This Denverite says Palantir can go fuck off.

The reception of this move appears to be... mixed[0]. As a Denver resident, I'm interested in seeing if this moves some larger offices out of Boulder and into Denver. Boulder seems to be suffering under the weight of zoning laws[1], but Denver seems to be capable of expanding, or at least adapting[2].

[0] https://www.reddit.com/r/Denver/comments/iczx59/palantir_hq_... [1] https://www.nytimes.com/2016/07/04/business/how-anti-growth-... [2] https://www.denverpost.com/2018/08/06/denveright-denver-plan...

Boulder is our own mini SF here in Colorado. Housing is artificially expensive and has many of the same things going on as SF regarding zoning. Really cool and hip place that has become increasingly unaffordable over the last decade.

i love how these giant companies choose to locate in municipalities that are either geographically,culturally or politically hostile to expansion & gentrification AND THEN bitch about nimbys. maybe we were better off when the coastalites just thought we were all backwater and racist.

> The last decade

It think it goes back a bit further than that. Boulder has been seven square miles between the mountains and reality since the early 90's.

While interesting, it's important to not interpret Redditor opinions as representative of the larger populace.

Does anyone think this will start a trend of de-centralizing Silicon Valley? I'm just wondering what the world looks like if these companies continue to have remote employees. Will there be a need for an HQ in such a high cost area?

Remote work actually makes having an HQ in a high-cost area much cheaper, but it also means that ease of recruited talented administrative staff becomes a more important consideration (as opposed to talented development staff). I am not sure how one can or should balance prestige and HR considerations.

Another consideration is how hostile California in general, and San Francisco in particular have become towards business(es).[1]

[1] https://twitter.com/elonmusk/status/1259638112688304129?lang...

I think the trend was already in progress, and Covid-19 just accelerated it by N years.

That's the general thing. Covid-19 isn't going to force long-term trends that are otherwise fundamentally unattractive. It is accelerating changes that were already underway--and it's giving a bit of a shove to trends that companies/people just weren't ready to try out or commit to.

I hope it does, but I think the trend has already been going on for a while. I just hope that trend speeds up.

Palantir didn't start this trend, covid-19 did. It forced remote working and then many realized that it can actually work really well. And the accountants started looking at how much money can be saved on leases.

I don't think a week goes by without an article about that but I honestly don't see it. The concentration of talent and capital make Silicon Valley too attractive.

I think people vastly overestimate the long-term impact of covid, underestimate the benefits of agglomeration, underestimate the negatives of remote work, and apart from a few individual companies I don't think there is a trend even. I'm not even sure this move from Palantir is anything other than some sort of strange branding exercise to get more Trump government contracts

I agree with you that SV isn't going anywhere. The money people and best talent is entrenched there through their networks and simple things like home ownership.

The other question is where else? Texas? Maybe but not exactly welcoming to the liberal elitist attitudes. Europe? And you thought California is unfriendly to business... Canada? Australia? New Zealand?

Like it or not, the West is still relies on the US for technical dominance. And until there is an alternative, we should hope it stays that way a bit longer.

The general argument is that Remote is the new Silicon Valley, and therefore it doesn't matter as much where you live. I would say the collective talent of software developers distributed around the world rivals, if not exceeds, Silicon Valley talent. The question remaining is, can remote-first companies out-maneuver the centralized Silicon Valley entities?

I'll shill for Florida here. I think a lot of tech companies looking for an alternative to SV would do well to put it on the shortlist.

It has an extremely business friendly environment, a pro-immigrant attitude, no state income tax, one of the top educational systems in the country, a fairly blue-state ish culture, and (given the exodus from NJ/NY) a high concentration of skilled professionals.

Similar to Silicon Valley, there's very little prejudice towards old money or pre-conceived notions of what elites "should look like". Unlike Silicon Valley, there's hardly any aversion to growth or gentrification. Job and wealth creators are celebrated.

Living costs are pretty cheap, especially for idyllic locations. The housing stock is newer and more modern. One can easily afford to live in walking distance of world-class beaches on a FAANG salary.

The biggest downside is the humid summers, flat landscape, and mosquitoes. On the other hand, the air pollution is markedly better than California or the Northeast. There's more hours of sunshine per year. Also, unlike San Francisco, human defecation on the street is virtually unheard of.

> ...one of the top educational systems in the country, a fairly blue-state ish culture...

Not knocking on your statement, but i had not been aware of these as descriptive of Florida. I was under the impression that Florida was more of a red state, and while not at the bottom education-wise, didn't think they were near the top either. Again, not knocking your state, i just never heard of that.

This[1] has a breakdown of state performance in primary education with detailed statistical adjustments for confounders outside the educational system. The results are that Florida performs fourth best in the country (behind Mass, Texas, and NJ).

[1] https://www.vox.com/2015/10/26/9617514/test-scores-naep-2013

Thanks for sharing; TIL!

> people... underestimate the benefits of agglomeration, underestimate the negatives of remote work

Absolutely. If you're trying to solve hard problems and don't have incredibly talented people who have 5 or 10 years of experience working on teams, know how to execute tactically and how to develop high level strategies, etc, etc, 100% remote isn't going to work well. You'll get some things done, but the next company over that can develop a new grad into a highly performing engineer/product person/[insert other position here] in a little over a year is probably going to outperform you in almost every aspect of the business.

I think it's been ongoing for years - the high cost of living, prohibitive zoning practices, traffic due to overcongestion, higher taxes have all been contributing to general unhappiness for not only businesses but people in the bay. With the increase in remote working even before the pandemic, and now with it becoming the norm in the industry, I'm pretty certain SV is past its prime in terms of talent centralization. So yeah I'm thinking we'll continue to see more of an exit out of California in general.

they just moved to another central hub - Denver has tons of defense contractors. Does it count as decentralization if a fintech moves from palo alto to New York City?

Denver is very heavy with Federal government agencies. So in that sense it seems to be a logical step.

The ISR capital of DoD contracting and procurement.

I don't think Denver has quite exceeded the Anne Arundel-Fairfax axis quite yet.

Ignore the grandstanding, the two reasons why companies move out of a state/country:

1. Tax laws

2. Cheaper labor

Edit: 3. Be closer to the people that give them money

Don’t forget

3. Skiing.

4. To be geographically in the center of the nation when the nukes launch towards the U.S....plus, it would be handy to visit the cafeteria at Cheyenne Mountain [https://en.wikipedia.org/wiki/Cheyenne_Mountain_Complex]

I don't think that's true of "winner take all/most" businesses anymore. Who cares about saving 15% on labor in a business where the difference between the highest quality employees and just "good" employees is literally billions in valuation? There's a reason that so many of these giant incredibly profitable business are in places with punitive tax laws and some of the most expensive labor on the planet.

It's true, locality of talent pool matters..but covid has shown the degree to which it matters is quickly diminishing as evidenced by the handful of companies declaring WFH forever, or re-considering their office leases.

It'll be very interesting to see how going remote impacts various urban centers. I can imagine that centers like Silicon Valley will be hit hard as a ton of their labor can work from anywhere. Whereas places like Boston that have a heavy bio-tech investment are harder to relocate because you need people working in physical labs.

a lot of SV's tax base is going to disappear

Amazon's move earlier this year might be an early sign. They split their expansion across 6(?) different cities. I doubt society is moving away from offices or cities in the near future, but it's a whole lot easier to have teams outside the Bay.

Bay area municipalities have been making choices that degrade quality of life and could always count on tech companies paying more taxes anyway (hello housing crisis). There will be some hard decisions coming up.

Silicon Valley is NOT an urban center, it is a suburban area of Santa Clara County. It is Santa Clara Valley renamed, from Palo Alto down to San Jose and a bit north to Milpitas. I don't expect the pandemic and recession to impact Silicon Valley that much. You certainly don't see it in home prices or rents, which have either remained stable or gone up.

San Francisco on the other hand is hurting. Both rents and home prices are down.

I was able to negotiate a pretty sizable rent decrease here in Palo Alto. That's a single antidote obviously, but I think that would have been impossible if covid wasn't having a significant impact on the housing market.

Depends, rents have flattened across the entire bay. They are offering 2-3 months free rent all over the place.

1 bedroom condos in downtown SF have been flooding the market and selling under listing because they’re only attractive to people who want city life and live close to the office.

Single family homes and bigger condos further from downtown have been selling when only listed for a week. Those are driven by people’s desire for more space and historic low interest rates.

I’d say overall, SF real estate is actually doing quite well.

Silicon Valley also happens to be one of the biggest biotechnology hubs in the United States.

It's unclear if a significant number of the employees are going to move from PA to Denver or if Denver will simply be HQ in name.

New Hampshire has no State Income Tax, nor any Sales Tax. Not entirely sure whether they have their own version of a Capital Gains Tax (CA sure does). Karp will reap the benefits of moving to NH. Not sure if he will escape CA Tax Authorities coming after him (but if he has planned his move, he probably has access to the best advice money can buy.)

I have fond memories of the security guards at the Palantir building in Palo Alto. I helped run street experiments for a wireless startup back in 2011 and they always thought we were trying to hack their WiFi.

Blucifer bursts out into braying laughter.

I thought Palantir was headquartered in Langley?

Nah, just their servers ;P

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