Data analytics firm Palantir expects to turn a profit every quarter in 2023 on solid commercial customer growth, after reporting its first quarter of positive operating income and hitting $525 million in revenue.
Palantir carved out a substantial niche for itself supporting defence and intelligence customers.
Its software platforms are used for secure software deployment (CI/CD/SecOps) and real-time data analytics.
Whilst its marketing collateral is extremely ripe – e.g. Palantir says Foundry “integrates the semantic, kinetic, and dynamic elements of your business” – and CEO Alex Karp likes to wax lyrical about ontology, its products are hardly mysterious; if sophisticated: i.e. Foundry is a data analytics and visualisation SaaS platform.
Palantir’s US commercial customer base showed modest growth to 155 customers at the end of Q1 2023.
That is, regardless, a “ a sevenfold increase in customer count over just two years” said Karp on an earnings call early this week and, he added, “presents an immense opportunity for continued expansion.”
The company has added 50 commercial customers (existing clients include names like oil and gas supermajor BP) since Q1 2022, to generate commercial revenue of $236 million in the first quarter; a 15% increase.
Palantir AI platform: Building on private dataset capabilities
The earnings call came weeks after the company said it had built a new Palantir AI platform that can be deployed in war fighting scenarios, including to action activity against combatants in the field
Demos of the Palantir AI platform (AIP) in April showed an operator using an AI chatbot to order drone reconnaissance, generate several plans of attack, and organise the jamming of enemy communications.
When it comes to the new Palantir AI platform, “we were fortunate in that we began building years ago the foundational architecture that will be required in order to meaningfully leverage the power of these new technologies within the context of privately held datasets” Karp told shareholders in a letter on May 8.
Pointing to architectural constraints against autonomous use, he added: “We understand that the extent to which democratic regimes ultimately attempt to curtail the development and more widespread deployment of these capabilities will be determined by the willingness and ability of the software industry to construct the guardrails that both constrain their use and harness their power. We must also remember that undemocratic regimes will not allow their development of artificial intelligence to be restrained by such moral considerations.
CEO Alex Karp took a moment to wax lyrical about the powers of Palantir AI and large language models on this week’s earnings call, telling analysts: “In the last 20 years, there's never been a development like this.
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“You have a technology that will allow you to outproduce, change the margin of your company, understand your business, react on the battlefield quicker, predict things on the battlefield in a way, collapse your enterprise so that the top and the bottom actually work together, pre-empt attacks, create software that is so obviously dominant that adversaries quiver and scurry away instead of attacking us or our allies.”
Chief Business Affairs Officer Ryan Taylor added: “We're investing in delivering digital deterrence and AI-driven efforts around the world from the Middle Eastern Pacific and European theaters. And with pressing global events, we continue to lean into our support for the U.S. and its allies across Eastern Europe.”
“The first iteration of the [AIP] platform will be made available to select customers this month” Karp said.