How much worse does the world have to get before Palantir is happy? In the sunny US tech world, the software company stands out with a devastating warning of global instability. Artificial intelligence could be the crisis that artificial intelligence wanted.
Now is a great time for cynics. AI is touted as developing into a dystopia. You often hear the phrase “Oppenheimer’s moment” in meetings with technology companies. This is a reference to Robert Oppenheimer, the physicist who led the creation of the atomic bomb.
Exactly how generative AI will destroy us, or what kind of luck it will create, is not yet clear. But all this talk of great power is proving to be very useful for the value of a handful of companies. This week, AI chip maker Nvidia’s market capitalization hit $1 trillion at one point. AI startups such as Character.ai and Anthropic continue to raise funding even when funding elsewhere has dried up. Palantir’s stock price has more than doubled in five months.
Palantir made its new AI platform widely available this week. This tool can generate conversational responses using a kind of large-scale language model (LLM) that powers chatbots such as ChatGPT. Because it is based on customer specific data, it should avoid the hallucinations of false answers that plague other chatbots. A demo available on YouTube shows how it works on the battlefield and provides suggestions on how to identify enemy tanks and target them. According to the company, the Ukrainian military is already using some of the initial capabilities.
Palantir isn’t the only software company vying to see how generative AI can be used for something more productive than writing a college essay. IBM also announced a new AI platform called Watsonx. But IBM’s stock has fallen this year.
Palantir seems to do a better job than most methods of clarifying usage in the real world. “To bring these LLMs into the enterprise and enable them to process data requires a core set of technologies,” said Chief Technology Officer Shyam Sankar. “And we need a very strong governance control layer that can build trust in AI.”
It helps that AI-style mysteries and existential threats are Palantir’s trade targets. Few companies talk so much about disasters. Last year, the government warned that the world was underestimating the threat of a nuclear attack, citing that threat rate at around 20-30%. Co-founder and Silicon Valley investor Peter Thiel is known for making eerie remarks about global doom. In 2008 he described what he called the reemergence of an apocalyptic dimension into the modern world. The 20th century was a “wonderful and terrible” century, he wrote, but the 21st promises to be more of both. The fears surrounding AI fit right in with that worldview.
What does Palantir actually do? The $31 billion company is sometimes described as the technology company’s answer to management consulting. It was created shortly after the 9/11 attacks to build software that could be used by intelligence agencies to counter terrorism, before expanding to other government departments and corporations. Its software scrutinizes data, aggregates information, finds patterns, and presents them in useful and understandable ways. The company’s services have enabled BP to reduce production costs by about 60%. He is also a frontrunner for a new seven-year NHS contract worth up to £480m.
But in recent years, Palantir has also been somewhat of a cautionary tale about what can happen when a company known to operate in the shadows steps into the light. Named after the dark far-seeing crystal ball in the Lord of the Rings trilogy, this gem has long had a virtue of secrecy. The idea of an eerie, all-knowing tech company was appealing to the media. In 2018, a Bloomberg article claimed the company knew “all about you.” Years later, the New York Times asked if he thought “too much”.
CEO Alex Karp has done a good job of bringing Palantir’s quirkiness to the fore. He is known for his fondness for German philosophy and speaks of his desire to work with creative and ‘quirky’ people. When I was in the company’s Denver office, I saw a drab office suit on display with an “emergency break” sign on the glass case.
Some of that appeal disappeared when the company went public at the end of 2020. Suddenly, the company was exposed to the mundane of quarterly earnings reports and investors seeking profits that met generally accepted accounting principles. The embarrassing truth is that in his 20 years, Palantir has never reported an annual profit. This year is expected to be the first year that the curse can be lifted.
Interest in AI has returned the mystique to the company. Add to that new profitability, and the result is stock price turmoil. It helps that the zeitgeist is catching up with Palantir’s thinking. If the AI is really driving us into oblivion, don’t expect Palantir to do anything surprising.
elaine.moore@ft.com
