Davos WEF

Palantir CEO: Silicon Valley can't be on 'Palo Alto island' — Big Tech must play by the rules

Key Points
  • Palantir CEO Alex Karp said the core problem in Silicon Valley is the attitude among tech executives that they want to be separate from the United States.
  • "We'd rather be regulated as a foreign island," he told CNBC in an interview from Davos.
  • Karp said that clear rules need to be established by the government and tech companies must then comply with them.
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Watch CNBC's Full Interview with Palantir CEO Alex Karp at Davos

Palantir Technologies co-founder and CEO Alex Karp said Thursday the core problem in Silicon Valley is the attitude among tech executives that they want to be separate from United States regulation.

"You cannot create an island called Palo Alto Island," said Karp, who suggested tech leaders would rather govern themselves. "What Silicon Valley really wants is the canton of Palo Alto. We have the United States of America, not the 'United States of Canton,' one of which is Palo Alto. That must change."

"We'd rather be regulated as a foreign island than be a part of the United States proper," he told Andrew Ross Sorkin from the World Economic Forum in Davos, Switzerland.

Government oversight has become a renewed topic in Silicon Valley this month, after Apple refused to provide a "backdoor" to password-protected iPhones used by the shooting suspect who killed three people in December at the Pensacola Naval Air Station before being fatally shot.

Attorney General William Barr said last week the tech company failed to provide "substantive assistance," a claim that Apple denied. Apple said it provided law enforcement with the suspect's iCloud data. President Donald Trump on Wednesday stepped up his pressure over the refusal, telling CNBC that he's "very strong on it."

Karp on Thursday said of the situation that clear rules need to be established by the government, which tech companies should then comply with.

"We need a clear code of what you're allowed to do under what context, when data can be encrypted and when it shouldn't," he said. "I think we're going to reach a consensus around this."

"Consumer tech companies, not Apple, but the other ones, have basically decided we're living on an island and the island is so far removed from what's called the United States in every way, culturally, linguistically and in normative ways," Karp added.

Palantir has largely embraced its relationship with the U.S. government, unlike its Silicon Valley counterparts such as Google, Amazon and Apple.

For example, it's worked with many agencies of the U.S. government, including the Defense Department, CIA and FBI, and has reportedly grown its government contracts to more than $1.5 billion. Karp on Thursday confirmed that the Peter Theil-backed company has ramped up its government work in the past year.

"My house has been protested for many months, almost every day," Karp said. "Our offices have been protested. Many Palantirians, who do not just follow what I say but are critical people, protested against it internally. Some people were so upset by it that they left. These are very hard decisions. I respect the people that that have decided they can't be involved in this, but we have a position."