Alex Karp is doing a victory lap. Preaching to a room full of corporate believers in Palo Alto, California, the American billionaire riffs on topics chief executives of publicly listed companies aren’t supposed to talk about.
Like how “stupid the analysts are”; how “Silicon Valley was only focused on trinkets and destroyed our culture”; and how “everybody who is involved in reforming this country has somehow worked at Palantir”.
Karp, the 57-year-old co-founder and chief executive of Palantir Technologies, was once a pariah in Silicon Valley for his unabashed patriotism. Now he is in vogue.
When Sir Keir Starmer visited Washington last month, he made appointments with two US billionaires: President Trump and Karp.
• Europe risks ‘ruin’ unless it adapts to AI, claims Palantir boss
Karp’s data analytics firm, co-founded in 2003 with Peter Thiel, the PayPal co-founder, has defied Wall Street sceptics and was the best-performing stock in the S&P 500 last year.
Hundreds of executives packed into a West Coast venue on Thursday to learn how companies from American Airlines and Heineken to Wendy’s and Walgreens are using Palantir’s artificial intelligence-powered platform to reorganise airline crew schedules, shrink expensive inventories and redirect trucks to meet unexpected demand.
Meanwhile, Karp is being courted by world leaders who believe Palantir can boost their nations’ security and productivity.
Despite backing Kamala Harris over Trump in the presidential election, Karp counts the US president as a fan. After The Wall Street Journal published an interview with Karp last month, headlined “Alex Karp wants Silicon Valley to fight for America”, the president sent a copy of the interview to Karp, with “Fight for America” underlined in black pen, alongside Trump’s signature and the message: “Alex — GREAT!”
This week, Wall Street has been preoccupied about whether the risk of the US falling into recession has been heightened by Trump’s tariff threats, upending the narrative of US economic exceptionalism.
Karp says the idea that US exceptionalism is under threat because of Trump’s policies “is obviously not true … The tech scene is just the best in the world, and that’s what actually matters now. And everything else, I think, is going to be a short-term problem.”
In a letter to shareholders in November, Karp claimed that Europe was at risk of “ruin” as companies and governments “stand on the sidelines” in the race to adopt artificial intelligence technologies.
Karp argues that the UK has an advantage over continental Europe in the era of advanced AI.
Speaking from his office in Palo Alto, Karp tells The Times: “America is on one track and continental Europe is on another. And we really have to make sure the UK stays on the American track, and there’s lots of reasons why it should.”
• Palantir’s AI platform drives huge boost in sales
He says the primary reason for optimism is that Britons are “the dominant native speakers of the most important language in tech”, or large language models, the complex algorithmic systems that power generative AI tools.
“In the past, the United Kingdom had a disadvantage because America had larger technical centres of excellence and the primary language was code. But now the primary language is English, and knowing how to code is much less important.”
A quarter of Palantir’s workforce is based in London.
Karp says Palantir’s decision to base its second largest office in London was not for commercial reasons, but because the UK and especially London is “a beacon for talent, both inside the United Kingdom and from all over the world”.
In a surprising pivot, he suggests the UK’s romantic culture could also contribute to its success in the AI revolution. “People in the United Kingdom, until recently, married for love, not for a clan affiliation,” he says. “I realise this becomes slightly controversial but, you know, the culture which marries for love and builds for passion and has a deep artistic kind of appreciation of things in their hobbies, is a culture that is actually going to do much, much better in this revolution.”
Palantir counts the NHS and the Ministry of Defence among its customers. Critics have argued that an American software company should not have access to NHS data.
Louis Mosley, the head of Palantir’s London office, says: “We are the answer to a lot of the privacy security concerns that people have about their medical records, rather than the problem. We’re the technology that ensures that nobody ever sees a bit of sensitive information which they are not entitled to see.” Palantir does not access, use or share data for its own purposes.
Karp grew up in Philadelphia, the son of an African-American artist and a Jewish paediatrician.
After university in Pennsylvania he studied law at Stanford, where he met Thiel, the co-founder of PayPal. Karp lived in Germany where he earned a PhD and planned to stay, until Thiel, who remains Palantir’s chairman, called in the months after 9/11 and, having sold PayPal, asking Karp to run a start-up using PayPal’s anti-fraud algorithms to combat terrorism.
Karp published a book last month, The Technological Republic: Hard Power, Soft Belief and the Future of the West, which argues that the 21st century is “the software century” and the fate of the US and its allies depends on the ability of their defence and intelligence agencies to evolve briskly to acquire and build AI weaponry such as unmanned drone swarms and robots that will “dominate the coming battlefield”.
Part cri de coeur, part Palantir sales-pitch, the book also explains aspects of his corporate philosophy, including that “the most effective software companies are artist colonies, filled with temperamental and talented souls”.
The software engineers working for Palantir are typically hired straight out of university in their twenties and then trained. “It is much easier to get the artist to perform unvarnished artistic works if they haven’t been taught how to paint incorrectly, which is what happens at other companies, basically,” Karp says. “And so we do much better with people with minimal skills.”
Palantir’s name is derived from the “seeing stones” or “palantíri” in JRR Tolkien’s The Lord of the Rings. The company’s offices are named after locations in Tolkien fantasy books and employees refer to themselves as “hobbits”. The organisation has an unusually flat, non-hierarchical structure. New hires are given one of a handful of job titles that will never change during their career at the company. Only an employee’s responsibilities will change.
Palantir has repeatedly proven Wall Street sceptics wrong.
Revenue for the fourth quarter reached $828 million, above expectations of $776 million, and up 36 per cent on the year. Commercial revenue grew by 31 per cent to $372 million, while government revenue rose 40 per cent to $455 million.
However, investors are pricing in huge speculative growth, with the company trading on an earnings ratio of about 522. In contrast, Nvidia is trading on a price to earnings ratio of 39.
Karp does not take kindly to critics suggesting his company is overvalued. “I love the idea of getting a drone and having light fentanyl-laced urine spraying on analysts that tried to screw us,” he said during a talk in New York to promote his book last month.
He accuses Wall Street analysts of groupthink and spending “all their time pumping up companies with loose, thin, carcinogenic software that was largely parasitic because they thought their CEOs were cool”. He adds: “Many are kind of cultivated by financial people that take them out and tell them how smart they are, all while laughing behind their back — and you know you’re supposed to bite your lip and not notice any of this. That’s what we’re taught to do, and maybe that’s what I should do. But unfortunately, I’m not good at that.”
Some critics have suggested the company is impossible to value because so much of its work is in classified government contracts. However, Karp believes that is “complete BS”. “You can look at our US commercial business,” he says.
Karp has an estimated net worth of $7.8 billion, according to Bloomberg’s billionaires index. He holds a 2.5 per cent stake in Palantir and has sold $1.9 billion in Palantir stock since the start of 2024 under a share-selling plan.
However, he says he is not a “big spender”. “I try to keep a small portion of my net worth outside of Palantir,” he says. Some of his fortune is going on an expensive cross-country ski habit. “Cross-country skis cost $1,000 a piece,” he says. “I pay huge taxes. Then, you know, I have all the cross-country skis you could possibly have.”
How Palantir stood out when working with Wendy’s
Pete Suerken, the head of Quality Supply Chain Co-op, the company that serves 6,400 Wendy’s restaurants, says Palantir’s AI platform is helping the business save money by allowing it to reduce its inventory and respond more quickly to customer purchasing trends.
Over the last 30 to 40 years, the food service supply chain industry’s answer to any problem has simply been to buy more inventory, he says. That means for Wendy’s to service a $9 combo meal, it has to have 30 days of inventory of any one ingredient sitting across its network, or $370 million in ingredients somewhere in North America.
“Our industry has gotten so challenged,” Suerken says. “Our margins have shrunk. We’ve got labour costs. Continuing to carry inventory of these types of numbers simply isn’t possible.”
Wendy’s met some of America’s biggest software companies before settling with Palantir. However, Suerken says: “To be perfectly blunt, we were treated like a little old, poor, broke supply chain that made cheeseburgers and frosties, and they gave us all the reasons why we weren’t good enough to work with.” He says that Palantir took the time to visit Wendy’s, learn about its business, and come back with outcome-based solutions.
Palantir’s engineers helped Wendy’s to organise its data and create a system which tracks sales and promotions to predict stock shortages ahead of time.
Suerken cites a huge SpongeBob SquarePants promotion at the restaurant chain last year, when demand unexpectedly “went parabolic in a matter of hours”.
He says: “No demand forecasting model would have ever projected what we had happen to us the first day or two of that promotion.” Without Palantir’s software, he thinks the company wouldn’t have noticed the spike in demand until 48 to 72 hours later, missing out on sales. Over time, Suerken estimates that the technology will deliver a return on investment of between eight and ten times.
Guests at the company’s customer conference, known as AIPcon, said they were impressed by the willingness of Palantir’s engineers to work with their own technicians and the speed of implementation and high security solutions.
Other prospective Palantir customers said they were working out how to define the investment returns of the technology to convince their boards that it is a worthwhile investment.
