Palantir Technologies’s decision to move its headquarters from Colorado to Florida is raising fresh concerns about the state’s business climate, with a new report warning the departure could shave hundreds of millions of dollars from Colorado’s economy and signal broader challenges for its technology sector.

The artificial intelligence and software company, one of Colorado’s most valuable publicly traded firms, announced last week that it has moved its headquarters to a suburb of Miami after five years in Denver, offering few details about the decision.

Colorado’s economic output could fall by $178 million if Palantir relocates 90 workers, according to a report released Tuesday by the Common Sense Institute. It remains unclear how many Palantir Technologies employees are currently based in Colorado or how many will stay.

Gov. Jared Polis said company executives told him the company has about 500 employees in the state. Still, the report from the Common Sense Institute, a nonpartisan economic think tank, cites more conservative estimates from the software company Unify, bringing it closer to 87 workers.

During its time in Denver, Palantir Technologies faced criticism over its contract with U.S. Immigration and Customs Enforcement to develop ImmigrationOS, an app designed to streamline deportations with “near real-time visibility” into self-deportations, as well as over its ties to the Israel Defense Forces.

The company was among the dozens of donors who funded the construction of the $300 million White House ballroom that required demolishing the East Wing. 

Palantir Technologies’ sudden exit, announced in a short post on X, was a shock across Colorado. 

“Whenever a multibillion-dollar company leaves your state, it’s worth taking a deeper dive and better understanding the economic consequences of that kind of decision,” said Kelly Caufield, the executive director of the Common Sense Institute. 

She said that even if Palantir Technologies maintains most of its local operations at its current size, Colorado has still suffered a blow to its reputation in the technology sector.

Best case? Palantir’s exit is a one-off incident. Worst case, which Caufield said was more likely, more companies will follow.

Caufield said she’s concerned this could be the start of a trend in Colorado, one that many business leaders have warned about over the last few years.

According to its annual reports for fiscal years 2024 and 2025, Palantir Technologies cited concerns about artificial intelligence regulations adopted by Colorado lawmakers last year.

The state’s AI law — one of the first in the nation — was designed to regulate “algorithmic discrimination.” The law was originally set to take effect on Feb. 1 of this year, but during the 2025 session, Colorado lawmakers delayed the new regulations from taking effect until June 30, 2026. The delay was supposed to give lawmakers more time during the 2026 session to find a compromise between Big Tech, consumer advocates and business interests.

Palantir compared Colorado’s “state-level oversight” to the European Union’s Artificial Intelligence Act.

“Compliance with such obligations may be difficult, onerous, and costly, and could adversely affect our business, reputation, financial condition, results of operations, and growth prospects,” the company stated on Tuesday.

With the combination of AI pushback to a proposal to create a graduated income tax system, Caufield said it’s hurting Colorado’s competitiveness and the pains are starting to show.

“The mounting regulations, particularly at a super sector that includes technology for Colorado, I think, are all a part of Palantir’s decision, which really came with some consequences to the Colorado economy,” said Caufield.

If other technology companies leave the state, the Common Sense Institute reported that it found a fiscally conservative and hypothetical 0.1% decline in the professional, scientific, and technical services sector would lead to nearly 1,400 jobs lost and a GDP hit of $210 million.