WEBVTT 00:00:00.000 --> 00:00:04.357 Hello everybody. We are here at Palantir's ninth AIP Con with the CEO 00:00:04.440 --> 00:00:06.237 and co-founder of Palantir, Alex Karp. 00:00:06.320 --> 00:00:09.237 Alex, thanks for being here. >> Great to be with you. 00:00:09.320 --> 00:00:12.757 >> Over the past 6 months, a lot of people have had a lot to say about your 00:00:12.840 --> 00:00:16.717 company. The media has stuff to say, investors have stuff to say, short 00:00:16.800 --> 00:00:19.917 sellers have stuff to say. What do you have to say about what's happened over 00:00:20.000 --> 00:00:22.157 the past 6 months with Palantir? 00:00:22.240 --> 00:00:26.197 >> Um well, you know, maybe we should ask what the mullahs have to say about 00:00:26.280 --> 00:00:29.317 what's happened over the last 6 months at Palantir. I think you should start 00:00:29.400 --> 00:00:31.637 there. You know, like let's go right to 00:00:31.720 --> 00:00:33.837 the people of the customers. 00:00:33.920 --> 00:00:36.397 Ask the customers. You know, it's 00:00:36.480 --> 00:00:40.957 uh yeah, I you know, um we spent 00:00:41.040 --> 00:00:45.797 uh we started 20 years ago saying we're going to do value creation. 00:00:45.880 --> 00:00:49.597 Uh don't for you know, it's like we're not going to you know, take your weird 00:00:49.680 --> 00:00:53.317 category you learned at business school at Harvard probably, you know, about how 00:00:53.400 --> 00:00:57.677 to build software, build a parasitic little trinket and install it because 00:00:57.760 --> 00:01:00.837 that's what venture capitalists wanted, because that's what analysts wanted, 00:01:00.920 --> 00:01:04.157 because that's what banks would underwrite, because that's 00:01:04.240 --> 00:01:07.277 how they gave you your underwriting fee 00:01:07.360 --> 00:01:09.557 and and pre-bought your equity before 00:01:09.640 --> 00:01:12.037 they sold it to retail after their hedge 00:01:12.120 --> 00:01:17.677 fund friends got in and you got [__] and they got laid. Uh um and we said 00:01:17.760 --> 00:01:20.517 we're not going to do any of that. We were going to build things 00:01:20.600 --> 00:01:23.397 uh that were super valuable and de facto 00:01:23.480 --> 00:01:25.677 get paid. I've been telling people for 00:01:25.760 --> 00:01:29.837 decades now we essentially get paid uh 00:01:29.920 --> 00:01:32.437 uh uh after we create value for you. 00:01:32.520 --> 00:01:36.477 >> Right. >> On your terms, according to your institution. We did this with 00:01:36.560 --> 00:01:39.197 clandestine services, special forces, 00:01:39.280 --> 00:01:43.797 Maven, every institution in government, every ally in the world, some of which 00:01:43.880 --> 00:01:47.797 love to admit they work with us, many of which don't admit they work with us. We 00:01:47.880 --> 00:01:51.677 then went into commercial. Everyone said we had no commercial product. But we 00:01:51.760 --> 00:01:54.277 grew commercial at a rate no one's ever seen before. 00:01:54.360 --> 00:01:56.997 >> The last earnings were one of the craziest earnings we've seen in the 00:01:57.080 --> 00:02:00.517 history of not just Palantir, but in the entire stock market. 00:02:00.600 --> 00:02:04.757 Why are you guys growing as fast as you guys are growing? 00:02:04.840 --> 00:02:08.917 >> Well, again, it's very much linked to this. Everybody is still You build these 00:02:09.000 --> 00:02:12.917 organizations commercial, military, institutional, 00:02:13.000 --> 00:02:14.837 clandestine services. 00:02:14.920 --> 00:02:17.637 You can't really They're not built to 00:02:17.720 --> 00:02:20.517 change. At best, they're built to adapt. 00:02:20.600 --> 00:02:23.037 Our organization is maximally adaptive 00:02:23.120 --> 00:02:26.037 on the back of a couple I principles and 00:02:26.120 --> 00:02:28.797 has maximal range of motion. And that 00:02:28.880 --> 00:02:30.917 and they are built for right now, 00:02:31.000 --> 00:02:35.837 meaning people want value. And like, you know, now people who are trying to 00:02:35.920 --> 00:02:39.837 understand where the value is work with broad categories, large language models 00:02:39.920 --> 00:02:42.197 versus software versus hardware versus 00:02:42.280 --> 00:02:44.877 like the client, whether it is the US 00:02:44.960 --> 00:02:49.317 military now doing in my view, you know, it is all of our jobs to protect the 00:02:49.400 --> 00:02:53.397 warfighter. Even if you don't agree with any other part of government or this 00:02:53.480 --> 00:02:57.237 administration, once the warfighter is putting their life in danger, it's our 00:02:57.320 --> 00:03:01.037 responsibility, in my view, to support them, especially business leaders who 00:03:01.120 --> 00:03:05.797 are making doing very, very well in this country. But it's like, you know, at the 00:03:05.880 --> 00:03:09.397 end of the day. And then the other thing, by the way, is one of the biggest 00:03:09.480 --> 00:03:14.277 critiques of Palantir still is, but what is it? Is it software, hardware, LLM? I 00:03:14.360 --> 00:03:18.557 mean, read read the somewhat innate often I don't even think they're I think 00:03:18.640 --> 00:03:21.877 at this point they're probably just hired help when they're writing these 00:03:21.960 --> 00:03:25.837 crazy short things about us. But it's like, but but the legitimate thing is we 00:03:25.920 --> 00:03:27.717 don't fit into any of these categories. 00:03:27.800 --> 00:03:29.477 >> Yeah. >> But that's why we're valuable. That's 00:03:29.560 --> 00:03:33.957 why the client All of our clients need to move from categories that make no 00:03:34.040 --> 00:03:37.477 sense for them to the category that does make sense to them, which I'm the best 00:03:37.560 --> 00:03:41.517 in the world, whether it's the US CENTCOM or whether it's commercial 00:03:41.600 --> 00:03:44.677 clients. And by the way, it's the same thing internally. Like we're just trying 00:03:44.760 --> 00:03:46.957 to slot people into a position where we 00:03:47.040 --> 00:03:51.957 can get the most value for themselves and then therefore for Palantir. 00:03:52.040 --> 00:03:54.877 >> Software companies have gone through a fundamental re-rating in the broader 00:03:54.960 --> 00:03:58.197 market. A lot of people are wondering is AI eating software? The interesting 00:03:58.280 --> 00:04:01.237 thing about Palantir is I don't think you ever characterize yourself as just 00:04:01.320 --> 00:04:02.717 an AI company, just a software company. 00:04:02.800 --> 00:04:06.677 It was we are a value company. We get paid when we deliver value. How do you 00:04:06.760 --> 00:04:09.277 think you survive in this new world of AI disruption? 00:04:09.360 --> 00:04:12.317 >> Well, no, the thing is they they they of course they need broad categories and 00:04:12.400 --> 00:04:15.917 the broad category they may have of course but again, in the beginning the 00:04:16.000 --> 00:04:19.277 broad category that they had of us is we weren't a software company because we 00:04:19.360 --> 00:04:22.917 were a services company. By the way, one of the most important indicators in the 00:04:23.000 --> 00:04:25.357 market is everybody wants to be us. 00:04:25.440 --> 00:04:27.877 >> Yeah. >> Every two days >> Well, four deployed engineers is now 00:04:27.960 --> 00:04:29.997 being used everywhere. >> like you're going to see all the 00:04:30.080 --> 00:04:34.157 research labs are all everybody's going to have like a Palantir because it's the 00:04:34.240 --> 00:04:37.117 only way to create money for the customer which is the only way to get 00:04:37.200 --> 00:04:38.557 paid. Everything is too amorphous. 00:04:38.640 --> 00:04:41.637 Everything else is too amorphous and not quantifiable and you're going to be 00:04:41.720 --> 00:04:44.877 competing at the end of the day with somebody who's going to buy Palantir and 00:04:44.960 --> 00:04:48.557 how the [__] you're going to explain to them that your your hype trinket is 00:04:48.640 --> 00:04:49.957 going to create value when it doesn't. 00:04:50.040 --> 00:04:51.677 Especially where the delta value 00:04:51.760 --> 00:04:54.317 creation on timelines, margins and our 00:04:54.400 --> 00:04:57.997 pure alpha is so large. Um, but 00:04:58.080 --> 00:05:01.717 to your point, no, we were never ever 00:05:01.800 --> 00:05:04.117 viewed ourselves as like we are X plus 00:05:04.200 --> 00:05:06.957 minus one. Right. We are a sui generis 00:05:07.040 --> 00:05:09.037 unique way of doing things which does 00:05:09.120 --> 00:05:11.197 include like a 00:05:11.280 --> 00:05:14.237 actual human labor augmenting the labor 00:05:14.320 --> 00:05:18.917 now with AI, uh encoding it both the knowledge of your institution meaning 00:05:19.000 --> 00:05:22.157 the data but also more importantly your assumptions around the data, especially 00:05:22.240 --> 00:05:25.637 assumptions that are impossible to capture like basically your tribal 00:05:25.720 --> 00:05:30.317 knowledge and melding that into something that is unique. And and part 00:05:30.400 --> 00:05:32.517 of the reason people don't want to understand is you know this famous 00:05:32.600 --> 00:05:36.597 thing, you know, you sit you sit you stand where you sit. It's very hard to 00:05:36.680 --> 00:05:41.037 acknowledge these things because this is a radically have have not world and a 00:05:41.120 --> 00:05:45.837 lot of people including the software thing, if you can't plausibly create 00:05:45.920 --> 00:05:48.997 value rapidly, you're going to disappear. 00:05:49.080 --> 00:05:52.837 Like and like but by the way, it's like, you know, white-collar workers, certain 00:05:52.920 --> 00:05:57.077 weak software companies, it's like steak dinners and a widget, that's not going 00:05:57.160 --> 00:06:00.397 to survive. It doesn't matter. You could do weird financial machinations. None of 00:06:00.480 --> 00:06:05.357 it is going to work. Uh and if you're just doing pure, you know, pure pure 00:06:05.440 --> 00:06:08.437 pure LLMs, well, that's very hard to make that work in enterprise. You see 00:06:08.520 --> 00:06:10.717 this again, without going into all the 00:06:10.800 --> 00:06:14.797 Pentagon drama, it's like, "Yeah, but 00:06:14.880 --> 00:06:18.357 you know, it's like that's nice and we're replacing you." 00:06:18.440 --> 00:06:22.397 >> Well, 2 years ago you said at AIP Con number four that the world will split up 00:06:22.480 --> 00:06:26.037 into chips and ontology. And quite frankly, you said it in a very simple to 00:06:26.120 --> 00:06:28.837 understand way that to this day I hear from people saying, "Oh yeah, Karp told 00:06:28.920 --> 00:06:32.637 us 2 years ago the LLMs will be useful, but they will not be where the value 00:06:32.720 --> 00:06:35.197 comes from." Do you think the world has figured that out yet? 00:06:35.280 --> 00:06:39.197 >> No, what the world has figured out, I don't know. It's very hard. I think it's 00:06:39.280 --> 00:06:43.677 it's super hard for people like No one's figured out this world completely. And 00:06:43.760 --> 00:06:45.397 we have never seen anything like this. 00:06:45.480 --> 00:06:50.517 We have like technology has in the modern world has been very aligned with 00:06:50.600 --> 00:06:54.397 the society itself. >> Yes. >> But this technology is not purely 00:06:54.480 --> 00:06:57.277 aligned with the society the way it originally was. You have like people 00:06:57.360 --> 00:07:01.317 who've historically had the best jobs in the world, the most protected, most 00:07:01.400 --> 00:07:05.397 respected, most interesting. Yeah, but those jobs are going to disappear and 00:07:05.480 --> 00:07:09.757 very rapidly. And those people are not used to having like, you know, the way 00:07:09.840 --> 00:07:11.557 vocational labors are treated, right? 00:07:11.640 --> 00:07:15.717 So, it's like that's going to be We we have on the military front, all of a 00:07:15.800 --> 00:07:19.997 sudden America's doing things that, you know, like 2 3 years ago a lot of people 00:07:20.080 --> 00:07:22.677 were looking at America as like, "Well, we could definitely do that, especially 00:07:22.760 --> 00:07:26.277 if we didn't spend half the money, right?" No one thinks that now. 00:07:26.360 --> 00:07:30.077 And and it's like on every front. So, this is a We're in We're in unchar- 00:07:30.160 --> 00:07:34.477 charted territory. And the best thing that can happen to you is you And again, 00:07:34.560 --> 00:07:38.717 this is where people could learn from retail. You first of all, you have to be 00:07:38.800 --> 00:07:43.277 on the front line yourself. You cannot outsource what you're doing to an expert 00:07:43.360 --> 00:07:47.597 unless that expert then conversely the definition of an expert nowadays has to 00:07:47.680 --> 00:07:51.637 be you were right and therefore I think you might be right tomorrow not you have 00:07:51.720 --> 00:07:54.797 some weird degree or something or someone says you're an expert or you you 00:07:54.880 --> 00:07:58.957 know and and then you really have to investigate these things yourself and 00:07:59.040 --> 00:08:03.557 you have to be open to yeah things are changing so rapidly that yeah what 00:08:03.640 --> 00:08:06.557 existed yesterday is not going to exist tomorrow. 00:08:06.640 --> 00:08:09.317 >> There's a war happening right now. I'm sure there's a lot of people that have a 00:08:09.400 --> 00:08:12.277 lot of thoughts about it. What is Palantir's message about what's happening? 00:08:12.360 --> 00:08:15.357 >> Well, everybody who's watching this 00:08:15.440 --> 00:08:19.477 should just reflect no matter where you are on war or this 00:08:19.560 --> 00:08:22.117 administration or anything else this 00:08:22.200 --> 00:08:25.397 country has an ability to define itself 00:08:25.480 --> 00:08:28.397 meaning the our constitutional order and 00:08:28.480 --> 00:08:30.197 the spirit around it 00:08:30.280 --> 00:08:33.397 and our economic success because it is 00:08:33.480 --> 00:08:36.237 defended by courageous men and women who 00:08:36.320 --> 00:08:40.597 are willing to put their life on the line and 00:08:40.680 --> 00:08:44.517 by the way life on the line they also have many most have like children at 00:08:44.600 --> 00:08:47.477 home spouses at home like these are 00:08:47.560 --> 00:08:52.237 people taking on enormous risk that have a lot to lose and at Palantir we're you 00:08:52.320 --> 00:08:53.997 know as has been reported on the front 00:08:54.080 --> 00:08:56.477 line of a lot of these things and we 00:08:56.560 --> 00:08:59.517 obviously believe once once once the 00:08:59.600 --> 00:09:04.397 proverbial bullets start flying we have one side we're on that side we're going 00:09:04.480 --> 00:09:08.157 to support it all the way through beginning during and after we're not 00:09:08.240 --> 00:09:10.597 particularly attenuated to popularity or 00:09:10.680 --> 00:09:13.677 polls the warfighter is fighting for us 00:09:13.760 --> 00:09:15.837 and we are going to fight for them. 00:09:15.920 --> 00:09:19.357 >> A lot of people have debated the value of what makes an AI company an AI 00:09:19.440 --> 00:09:22.317 company and you know you have what's happening in the world right now with 00:09:22.400 --> 00:09:25.117 different models competing for the infrastructure to be able to provide 00:09:25.200 --> 00:09:29.077 value some models not being liked by the government. Is Palantir in a strong 00:09:29.160 --> 00:09:31.997 position over the coming years to continue supporting the Department of 00:09:32.080 --> 00:09:33.877 War regardless of what AI models are in 00:09:33.960 --> 00:09:35.957 power or in popularity? 00:09:36.040 --> 00:09:40.637 >> Well, I mean, it's uh we provide the the 00:09:40.720 --> 00:09:42.717 the air the layer that makes these 00:09:42.800 --> 00:09:45.517 models value valuable and it it it 00:09:45.600 --> 00:09:48.477 orchestrates where where and how they're 00:09:48.560 --> 00:09:50.797 used and and a lot of things that can't 00:09:50.880 --> 00:09:55.837 be discussed in public, but um I look, I'm very focused on we will do 00:09:55.920 --> 00:09:57.717 whatever's best for the warfighter. 00:09:57.800 --> 00:10:01.637 We're That's that's the priority, maximum priority for us. 00:10:01.720 --> 00:10:04.517 Uh I think we're doing pretty well as a company and 00:10:04.600 --> 00:10:08.237 you know, people will We're just going to be a very exciting ride. 00:10:08.320 --> 00:10:12.237 >> The operating margins of Palantir also have grown pretty exponentially. I mean, 00:10:12.320 --> 00:10:15.757 a year ago they were at 17%. We're now pushing 50%. We have not seen anything 00:10:15.840 --> 00:10:19.317 like this in software. What is >> Well, what about our rule of 127? 00:10:19.400 --> 00:10:23.917 >> Well, it's it's a new rule every 90 days >> Hey, size matters. 00:10:24.000 --> 00:10:25.757 It matters. People want to say it 00:10:25.840 --> 00:10:28.597 doesn't matter. 00:10:28.680 --> 00:10:33.237 >> Um what is the magic behind putting up the most insane numbers we've seen in 00:10:33.320 --> 00:10:36.837 software history? Is it internal culture? Is it 00:10:36.920 --> 00:10:39.557 >> it's it's the sum is the parts are very 00:10:39.640 --> 00:10:41.877 strong and the sum is much stronger than 00:10:41.960 --> 00:10:46.797 the parts. I mean, we are an artistic Look, there there there are very 00:10:46.880 --> 00:10:51.117 Nietzsche once said there were two artists of the German language and 00:10:51.200 --> 00:10:55.637 somewhat arrogantly, a kind of arrogance I relate to, said, "Uh myself and 00:10:55.720 --> 00:10:59.037 Heine." There are very few artists in business. 00:10:59.120 --> 00:11:00.957 I am one of them. Palantir is an 00:11:01.040 --> 00:11:04.277 artistic project and everybody else is 00:11:04.360 --> 00:11:07.997 trying to build things in like a non-artistic, 00:11:08.080 --> 00:11:11.117 very much based on what they has been 00:11:11.200 --> 00:11:15.437 understood in the past kind of way when the there is no road map, there's no 00:11:15.520 --> 00:11:17.877 playbook, and it's it really is the 00:11:17.960 --> 00:11:21.357 neuro divergence Yes. of Palantir as a 00:11:21.440 --> 00:11:26.317 company and our ability to manage highly in their own way 00:11:26.400 --> 00:11:29.437 differentiated and often in their own way without even realizing it 00:11:29.520 --> 00:11:34.397 neurodivergent people against a task that is more important than us. And then 00:11:34.480 --> 00:11:35.877 that seeps into the quality of the 00:11:35.960 --> 00:11:39.397 products and and and the way we execute. 00:11:39.480 --> 00:11:43.797 And you know, it's that concatenation um and then you could just judge us by 00:11:43.880 --> 00:11:48.557 our enemies. Look at them. Judges by our enemies. 00:11:48.640 --> 00:11:51.477 Yeah. >> Got it. Okay. Alex Karp, CEO, thank you so much. 00:11:51.560 --> 00:11:56.517 >> Yeah. Thank you. Yes. >> That was great. Hopefully nice meeting 00:11:56.600 --> 00:11:58.877 you for you. Good stuff. >> Yeah, I know. I always like seeing you. 00:11:58.960 --> 00:12:01.637 It's one of my highlights. >> Yeah, you know, I like seeing you, too. 00:12:01.720 --> 00:12:03.637 It's fun. >> Alex Karp, what do you think about the brick work here? 00:12:03.720 --> 00:12:06.597 >> I like the whole thing. >> You know, my background at my home studio is bricks. 00:12:06.680 --> 00:12:08.397 >> Yeah, I know. >> I know Iliano picked out the 00:12:08.480 --> 00:12:12.077 >> It's fake bricks. So just the ongoing joke online is like oh, the bricks are 00:12:12.160 --> 00:12:13.837 fake, they're real. >> Yeah, everyone's debating. 00:12:13.920 --> 00:12:17.800 >> Bricks and mortar. Hey.