It isn't simply a database, as I'm sure you know. There are multiple pipelines of information which need to be glued together, cross correlated, etc. They (Palantir) provide services to make policing citizens easier and allow police departments to overstep their boundaries.

Also, I'd like to point out that this isn't an "either or" situation. Obviously the government is involved, as they no doubt put out the contracts, but Palantir is the one cashing the check. They've created their entire business model around big secretive government contracts.