It's been a massive year for artificial
intelligence reshaping markets and the
global race for tech dominance. And few
companies sit closer to the center of
that transformation than Palunteer,
whose software powers decision-making
from Wall Street to the US government.
And here with me now is Palanteer CEO,
Alex Karp. Alex, great to see you.
>> Great to see you, too. We've been at
this for a long time,
>> a long many years, my friend. Let me
start here. Uh question for investors.
Maybe it's the biggest question for
investors right now. AI boom, Alex, or
AI bubble? A lot of smart people have
different views on that. I'm curious to
hear yours.
>> Well, I mean, first of all, it always
it's always interesting to to define
what it means to be smart. But um uh so
if smart means informed, I think uh
there the the debate comes down to um uh
two questions. um how large is the
market and how large is the market for
things that actually work. So there's
really two AI markets from Palanteer's
perspective. People using AI call it
enhanced intelligence to do basic things
but things that are not sophisticated
enough so that they would change your
revenue or margins.
>> That that is a very large market. Um you
you one could argue as an informed
citizen that that market is very large
but does may not create enough value to
justify the actual cost of large
language models or their implementation.
The the the our what we see on the
ground not again not not as an opinion
but as like a fact is a subset of that
larger AI market. I would call AI that
works either in a way that it can change
the battlefield or it can change your
margins or it can change your revenue
and by the way can do it in a way that's
so quickly that you can do it in the
public sphere. So you can do it as a
public company. You don't have to
inherently take the company private
although you can do it in the private
context or you can do it so quickly you
can change things on the battlefield
that portion of the market. Uh so the
subset of AI where you can show
quantifiable results again life and
death safety results or results so that
margins or revenue actually change
dramatically and quickly enough so that
you can capture the value while you're
still running the company in the in the
structure as it exists now. So it used
to be to do these things you had to
isolate essentially isolate an
institution. I want to rebuild my
military. I want to rebuild a company. I
want to change the trajectory of my
private company. The timeline on that
and that what you would have the
violence involved meant that you had to
take it offline for 5 years. Okay, that
that's a really and sometimes you still
have to do that. What the special thing
about the category we're in is you can
do all that so quickly uh that you can
show quantifiable results and that
portion of the market is expanding as a
subset. So if the whole AR market is
here, this was a tiny subset that is
metabolizing the rest of the AR market.
And so what we see on the ground is uh
it's a it's a that people are very very
receptive under the condition you can
show it having worked in a similar
environment somewhere anywhere on the
globe. So the part of the market that is
is weak that where people talk about a
bubble is in the institutional context.
So not consumer internet where you can
never you cannot show the thing having
worked that part of the market is is
very weak and dissipating. Now the part
of the market we're in which is we'll
show you the results quickly and we'll
get paid a subset of it uh that part of
the market's getting bigger and bigger
and bigger and that part of the market
is going to dominate the rest of the
market in the institutional context.
>> Let me ask you this. So you're
describing where Palanteer is today.
Alex, help me understand where, you
know, you think about where Palanteer
could be five years from now or 10 years
from now and and one way to think about
is that, you know, you you sometimes
talk about, Alex, how AI will define the
future of warfare. So, let's say you you
talk five or 10 years out. I'm
interested how how you think about what
the future battlefield will look like
and what Palunteers place on that
battlefield could be. Let let me let me
kind of invert the question and say
where will America be because I think
we're downstream from America's success.
Uh and America is the only country in
the world that provides everything from
chips to ontology above and below one
country. So the question is, can we grow
the aggregate GDP and can we grow the
subset of GDP that affects working-class
people? Because that's essentially the
challenge we have. We're in a unique
environment where we probably can grow
aggregate abs GD GDP in absolute terms,
meaning GDP that affects you and me. And
now we have to can we grow it in a way
that affects that positively affects the
welder, the plumber, the truck driver.
So this is the core challenge for
America. And then as a subset of that
because in a weird way uh our ability to
defend oursel or our need to defend
oursel is going to depend on our
economic strength and our military
strength.
>> And how does AI play into that?
>> So so yeah. So first of all something
that we just have to say over and over
and overgo we forget in this country.
We're the only country in the world who
has every part of the stack where the
dominant feature of that stack is built
in our country. So this is completely
unique. So we have a very different
problem than say Europe has. Europe has
the problem that they don't have any
part of the stack as the dominant
player. Now our pro so the advantage for
us is we can we have a very plausible
narrative to growing our economy. The
disadvantage for us is we have to show
we can grow the economy in a way where
the average person with a skilled job
participates. Now so how does AI happen?
It depends what you mean by AI. Again,
if you mean AI that you're just going to
be running some query, that's very hard
to see why GDP inherently grows. It's
also hard to see why the plumber, the
welder, the truck driver has a better
job or the job they have today, but gets
paid more tomorrow. And if you do if
you're doing AI the way the way
Palanteer is actually doing it on the
factory floor, on the battlefield, and
in corporate environments all over
America, you can see that what we're
doing is we're taking the welder and
saying, "Oh, we can make you into the
kind of welder that can work in a
complicated environment that you could
not have worked in the past. We're
taking the truck driver presumably and
saying, "Hey, if we reroute you this
way, you're more efficient. You save
energy. you actually know how to repair
your truck or predictively chair and so
you are a more valuable engineer and
arguably the most important thing is
we're equipping war fighters with lethal
technology that is substantially above
what our adversaries have which means
our adversaries don't want to fight with
us.
>> Do you do you see that remaining so in
the future?
Okay. Well,
the the danger we have honestly in this
country is just, you know, a play like
so many of the crazy debates we have in
this country are downstream from, you
know, we we have a bounty of riches and
like our issue is how do you how do you
manage that? Like it sounds like an easy
problem, but just as an example, if
Europe had one of these things, it would
be very good at protecting it. We have
so many of these things, people think
it's automatic. We're automatically
going to win. we can afford the we can
afford these internets and invites. My
personal view maybe not I'm not saying
those of everybody like we we like we
can't afford open borders and complete
delusion that we can get away with a
non-marritocratic society. Most of that
comes from the left but it's like if we
stick we can't get away with diverging
from our unique heritage which is
particularly valuable like you know free
speech, first and second amendment an
ability to defend ourselves. These
things are especially the fact that we
attract and retain the best uh
entrepreneurs from other countries but
we already have many of the best ones
here. Um and you know so like every
other country is scrambling to get
something to work. Our problem is
actually different problem. Can can we
stick to the hand we have? We've been
dealt a blessed hand.
>> C are we going to screw it up now? And
that that's really our problem. like are
we going to so regulate AI so that
somehow it's easier to do it somewhere
else. Are we going to eviscerate
concepts like meritocracy because you
know like partly because now this is
where Silicon Valley could do a better
job. People are nervous about
meritocracy because they think it's
meritocracy for me and like uh oligarch
an oligarch for you, right? So it's like
no it's like does this work for
everybody? is a real or most people like
are we going to have a society where
people believe that tomorrow is better
than today like or are we going to have
a dystopian set of views because people
think it's only working for Silicon
Valley. Um what what does it look like
to navigate foreign environments? Uh can
we be honest about like successes and
failure? I mean, like, can I get any
progressive I know to admit that
President Trump has done an amazing job
in foreign policy, especially on Iran
and especially on the border? Well, it
feel I think we it feels like we've come
to the part where I think a lot of
Americans right now uh Alex on that
point I think sort of feel like I'm for
kind of reflexely whatever my political
opponent is against is where
>> well again we're we're it's like it's
honestly it's we have a we have we we
have a we have a we're in a unique
environment where we've been blessed
with the most important resource in the
world currently. call it the ability
from chips to ontology like above and
below. Obviously, the two most valuable
things are kind of the chips and
ontology. They're both here
>> in this.
>> So, but but again, but again, but yes,
it means we have to get out of our
parochial little niche and start
evaluating things on the issues like we
we you know, the the the bounty of
riches that we have it it can be a huge
danger like do you know what any like I
spent half my life in Germany. Do you
know what Germany would do for our tech
scene? Any Europe country in Europe, any
country in the world? Like this is a
like no other country has this. And by
the way, it's it's it's incredibly hard
to replicate because it's not people
people want to believe, including in the
valley, it's like some pure IQ. It's
not. It's like it's like a way of
organizing things, a way of doing things
plus IQ and other attributes. And and
this is somehow in this country, if
you're like me, you're like, "Yeah, we
we we we our constitution was given to
us by a higher power. We have a special
role in the world." Some people don't
believe that. But, you know, there's a
lot of evidence for for what I believe,
including the this whole conversation.
And then the really the real question
is, do we screw it up? And yeah, we
could screw it up.
>> Let me ask you this. In this in this AI
discussion we're having, investors have
clearly determined, Alex, that Palanteer
is an AI winner. your stock has soared.
I talked to some analysts who cover
Palunteer. I want your reaction to this.
And I'll ask them, you cover Palunteer.
Why isn't Palanteer a hold? And here's
what they'll tell me. They'll say, I
like Corp. I like the company. I like
the tech, but
>> it is too pricey. It's too expensive.
We're nosebleleed levels. What do you
say to that?
>> How often have you been right in the
past? That's literally my qu my question
is
>> that would be your question to the
analyst. No, like I'm not going to
engage on your prognications of the
future if your record. By the way, this
is and as much as I like to bast
analysts and as much as many deserve it,
it's really there are analysts who are I
think some of the analysts say that I
think some of them say look I was wrong
in the past and now I'm looking deeper.
So it's it's one one can't generalize
even about analysts. But I would say all
sorts of people who have let's say all
sorts of people that have negative
attitudes towards Palier or broadly
defined the quote unquote analyst is
like you know nosebleleed level
valuation. The quote unquote journalist
that says we're we're we're powering the
surveillance state domestically. The
quote unquote person that says I'm a
conspiracy. The quote unquote person I
don't know. There's all these things in
every country. There's a negative
Palunteer meme. What I would say to any
one of them, and by the way, not just on
this issue, there's persuasion and being
right. One of the most important things
you have to ask yourself is how often
has this person been right? And that is
more important than is it persuasive?
If you analyst, journalist, politician,
if they've been right on five out of six
things and they say a seventh, I think
one should assume they're likely to be
right. What if they've been wrong about
all those things? And by the way, where
I do have a bone to pick with
>> like traditional financial people,
including their minions, the analysts,
some of them, not all, is
>> do you know how much money you've robbed
of people with your views on Palunteer?
>> Like, you know, it's like they have all
these views. There's no downside risk
for their view.
>> At what? It's like it really should be
next to every statement. I said don't
buy Palunteer at six. I said don't buy
Palunteer at 12. I and the welder,
plumber, technician who didn't buy it or
sold too soon, I owe them money.
And and by the way, let me tell you
something about Palanteer that is very
positive. By my reckoning, Palanteer is
one, if not one of the very few, if not
the only where the average American
bought
and the average sophisticated American
sat on the sidelines or sold. Why do
what do you think explains that?
>> Yeah, because the average American was a
lot smarter than they were and listened
and was not bigoted like was not was not
held down by a whole set of training
beliefs that were wrong like what does
it mean to build enterprise? What does
it mean to have FDES? What does it mean
to go to market? What does it mean to
get paid? Does your enterprise have to
be parasitic? Should it be a parasitic?
Should the host essentially be paying
for the privilege of making your company
larger and getting no value except for a
weird feeling that you get from the
parasite that you're better than you
are? It's like essentially replicating
the whole woke mind virus in the
enterprise. You know, they were open. By
the way, they were also not only they
were not bigoted against some obvious
truths that we've been saying for 20
years with by the way these views when
they were not popular
>> like what Alex
>> like America is a better way to organize
and live than any other place in the
world that even though it's better we
shouldn't be exporting or especially
it's better we shouldn't export we don't
need to export our values abroad we need
to be strong enough in America so that
nobody screws with us including my bo my
views on the border like we should have
actual border we should have an actual
culture We should have meritocracy. We
should not tolerate discrimination and
discrimination means against white males
or whatever that is. We we should we
should build the best products. The
products are going to have to be much
better than any other products in the
world or they're not going to get
implemented. Uh I mean all these things
we've been saying for 20 years and you
know what they pissed off a lot of
people in the league. You know who they
didn't piss off? The the the same people
were also making AI work for the truck
drivers, the plumbers. I run into people
all over America and quite frankly all
over the world. People who of like
normal means who are now rich because of
Palanteer. You know who's not rich
because of Palunteer? The people who
read the analyst notes and the people
who wrote them. And you know what?
They're also kind of still kind of angry
because while they're cruising along in
their broken down car, the person
cruising next to them in their beautiful
Tesla uh is a is a is an actual worker
in this providing actual value who may
have gotten rich on Palunteer. I want
>> and I by the way I love that it is
nothing makes me happier than looking in
my mind's eye at the at the at the at
the bank executive who's hanging out
with their thing who's living on the
drip drip of some highinterest loan
watching some person who's free American
riding their car who has a who did not
go to an elite school but bought knew
enough because they didn't probably go
to elite school to buy Palunteer shares
and now are you going to make even more
money using our platform? Let me ask you
this. I want to end here. There is a
book coming. I want your view on this.
It's a biography of you, The Philosopher
in the Valley. When I read this book, is
it going to be a fair, balanced portrait
of Dr. Alex Kark?
>> Well, I mean, only be fair and balanced
if everything was good. Um, no. Uh,
look, it's 70% accurate. It's very
>> What's the 30 that's not?
>> Uh, you know, he's got Trump derangement
syndrome, obviously.
>> How does that come out? uh like anything
that Palanteer's done that it's it's
basically it's two books. It's one book
about my childhood which is a complex
background and you know came from
nothing and highly dyslexic and
amorphous. is like the whole thing
amorphous background a little bit too
amorphous racially a little too Jewish a
little too uh very dyslexic uh political
that part's fascinating it's a little
hyperbolic but it's like 85 90% true um
then of course the Trump derangement
syndrome you know the fact that you know
you know President Trump did these
courageous things in Iran uh you knowh
and and and closed the border and and
pounders played a a role in these things
obviously not the role that the people
did the work or the president, but you
know that just sets off this mind virus.
So Karp has to be evil. It's you know
that part of the book obviously is is
you know but it's so obvious that you
can kind of read through it and yeah
there's some things but I guess it's a
good read. I think people read it uh
will say oh wow that's really
interesting. There's some things about
Alex I I didn't know and you know you
can assume all the things you don't like
about me are the in on the inaccurate
side and all the things you do are
accurate. But it's it I think a lot of
people are going to read it. I think
people will enjoy reading it. Since
we're talking politics there, final
question. How have and we've been
talking for a long time, the two of us
years. How have um how have politics
changed in Silicon Valley as you've
watched it? What's the arc been like?
And how has that if at all impacted the
defense tech sector?
>> Well, I mean, I'll tell you the thing I
get in most trouble for in my
intellectual circles is the following
statement. Silicon Valley, like the rest
of the world, will listen to you if
those ideas make you money. Now, of
course, you still have to have
convincing ideas that are true. But if
those ideas are not tailored to real
world things that work in the valley,
quite frankly, is dollars.
>> They will not listen. The fact is, and
again, I get whenever I tell this to my
intellectual friends, they stop talking
to me because they want to believe that
pure ideas change the world. Pure ideas
don't change the world. I'll tell you
what changes the world. pure ideas
backed by the military in this case
hopefully the US doesn't mean you have
to use the military if you're strong
enough like this is where I'm like a
palanteer is not a neocon project our
project is to make America so strong we
never fight that's different than so
almost strong enough so we always fight
right so your ideas get listened to if
you are dominant on the battlefield and
hopefully so dominant you don't have to
listen use it but if you do use it
people are like yeah I'm not screwing
with those or if those ideas make
someone a lot of money you still have to
have the ideas in part the intellectuals
get so angry. My intellectual friends,
it's like because they just think they
write a book, someone reads and it
changes the world. Nuh-uh. And like
that's not the way intellectual projects
have ever worked. The ideas have to have
a real world input. And so the fact that
Palunteer is that whatever we're at,
this changes the valley because not only
was the patriotism right, but the
patriotism make you rich. And that's
what that that impact on the valley is
going to be very long lasting. Uh and
I'm very proud of that. But again, you
can't just be proud of the idea that was
right from the beginning. It was been
right since the history of our country
that our way of organizing especially
our constitution is superior certainly
super superior for Americans again
superior for us doesn't mean we export
it to everyone in the world but superior
for us since conception and uh and uh
but you what to make people listen up in
their seats you need to be dominant on
the military and dominant on the economy
and Palunteer plays a really but for
role in the both of those areas and
that's something that I'm proud of
because not just because of the impact
but because the like the way in which it
reverberates both in Silicon Valley and
outside and by the way it also stands
for you know anyone can make it one of
the things that's in the biography is
you read where I came from read that
like there's no reason you can't advance
in this society and that's an important
lesson for everybody especially outside
the house.