How Palantir’s tech-based patriotism and politics grew into a multi-billion dollar company
In this weekly series, CNBC takes a look at companies that made the inaugural Disruptor 50 list, 10 years later.
Palantir is no stranger to politics. The data mining and software company got its start with government contracts, and 19 years since its inception, Palantir’s government work is still central to its business.
At its start, Palantir’s business came directly from the FBI, the NSA, and even the CIA, whose venture arm In-Q-Tel was one of the company’s earliest backers. CEO and co-founder Alex Karp is a self-proclaimed American patriot. For Karp, data and defense are intertwined, and his company’s contracts with government agencies reflect a commitment to leveraging technology to bolster the West. The company’s earliest splash was reportedly helping to find Osama bin Laden over a decade ago, and this year, Palantir began work for Ukrainian military operations.
In between, the company’s patriotism has prompted some criticism, internally and beyond. Palantir’s work with the U.S. Immigration and Customs Enforcement, or ICE, for example, infamously prompted a flurry of internal employee petitions, sparking nationwide debates about tech’s role in the U.S. and the line between protecting civil liberties and facilitating government duty.
Karp founded the company with well-known conservative tech investor Peter Thiel, and the two have publicly sparred over politics and technology. In an interview at the Aspen Ideas Festival, Karp commented on the division inside Palantir’s leadership. “Look, I think one of the problems in this country is, there are not enough people like Peter and me … we’ve been fighting about things for 30 years,” he told CNBC’s Andrew Ross Sorkin. Still, they run a company well enough together to consistently secure government contracts around the world, the successes of which have led to contracts in the private sector with companies like BP, Merck, and Sanofi.
Shortly after reports surfaced that Palantir assisted in tracking down bin Laden, CNBC rolled out its inaugural Disruptor 50 List in 2013, and Palantir would remain a fixture on the list until it went public via direct listing in 2020. Palantir shares are up about 12.6% since going public, but for 2022, shares are down over 55%.
While a bulk of its business is still for government agencies, work beyond that is growing: commercial revenue was up 120% in its last earnings report from August, while stateside commercial customers were up over 200%. Wall Street analysts covering the stock are split: a quarter have a “buy” rating, a quarter expect underperformance, and the other half have rated Palantir stock a “hold.”
What Palantir is actually doing for its customers, stateside or international, public or private, remains often unclear. From the start the company’s goals were secretive, fitting for a Department of Defense or FBI contractor. However, even as a $16.7 billion market cap publicly traded company, Palantir’s work remains opaque. Karp was the first Western CEO to visit Ukraine and meet with President Volodymyr Zelenskyy during this year’s conflict, and in its earnings call Palantir Chief of Business Affairs and legal officer Ryan Taylor confirmed that the company is “on the forefront of the problems that matter most in the world, from the war in Ukraine to fighting famine and monkeypox.”
But how exactly Palantir is managing those problems is unknown.
In a CNBC interview at this year’s World Economic Forum in Davos in May, Alex Karp estimated a 20%-30% chance of nuclear war in Ukraine. Though a relatively lone prognostication at the time, Karp doubled down on the possible dangers ahead in a September interview on “Squawk Box,” and in so doing, he emphasized his own company’s position in helping Ukraine defend itself against Russia: “Software plus heroism can really slay the giant.”
Secretive though it may be, Palantir has been clear about one major pivot from its CIA roots: health care.
During the height of the Covid-19 pandemic, Palantir assisted with domestic and international vaccine rollout. It has partnered with the CDC, NIH, and FDA in the U.S., as well as England’s NHS. In the private sector, it’s currently working with the health-care business of Japan’s Sompo, as well as Merck and Sanofi.
COO Shyam Sankar told CNBC in August that the company’s work spans health care’s entire value chain. It is “working with government agencies to help them distribute vaccines efficiently, plugging into the pharma companies and biomanufacturing processes that create them, driving the hospital operations that are getting those needles into your arms, and driving the health care outcomes, clearing the backlog in the wake of Covid.”
Palantir is likely to remain as secretive as it started, and Karp, committed to his nuanced politics and patriotism, will likely remain outspoken on both. For 19 years, Palantir’s data mining and analytics software has been the subject of noted successes and protests. Despite backlash, its tech wins hundreds of millions of dollars in contracts each year, employed by the world’s biggest geopolitical players to move chess pieces around the globe.
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Artificial intelligence chipmaker Cerebras Systems said on Friday that it’s withdrawing plans for an IPO, days after announcing that it raised over $1 billion in a fundraising round.
In a filing with the SEC, Cerebras said it does not intend to conduct a proposed offering “at this time,” but didn’t provide a reason. A spokesperson told CNBC on Friday that the company still hopes to go public as soon as possible.
Cerebras filed for an IPO just over a year ago, as it was ramping up to take on Nvidia in an effort to create processors for running generative AI models. The filing revealed a heavy reliance on a single customer in the United Arab Emirates, Microsoft-backed G42, which is also a Cerebras investor.
In its prospectus, Cerebras said it had given voluntary notice to the Committee on Foreign Investment in the United States about selling shares to G42. In March, the company announced that the committee had provided clearance.
Since its initial filing to go public on the Nasdaq, Cerebras has shifted its focus away from selling systems and more toward providing a cloud service for accepting incoming queries to models that use its chips underneath.
The announced withdrawal comes three days into a U.S. government shutdown that’s left agencies like the SEC operating with a small staff. In a plan for a shutdown published in August, the SEC said its electronic system EDGAR “is operated pursuant to a contract and thus will remain fully functional as long as funding for the contractor remains available through permitted means.”
On Tuesday, Cerebras said it had raised $1.1 billion at a valuation of $8.1 billion in a private funding round. At the time, CEO Andrew Feldman said that the company still wanted to go public, rather than continue to raise venture capital.
“I don’t think this is an indication of a preference for one or the other,” he told CNBC in an interview. “I think we have tremendous opportunities in front of us, and I think it’s good practice, when you have enormous opportunities, not to let them fall by the wayside for lack of capital.”
Feldman thought the original prospectus from last year was out of date, especially considering developments in AI, the spokesperson said on Friday.
Well heeled technology companies have been quickly signing up for additional infrastructure to handle demand. On Tuesday CoreWeave, which rents out Nvidia chips through a cloud service, said it had signed a $14.2 billion agreement with Meta. ChatGPT operator OpenAI said last week that it had committed to spending $300 billion on cloud services from Oracle.
The government shutdown did not factor into Cerebras’ decision, the spokesperson said.
An employee arranges a salad dressing display at an Amazon Fresh grocery store on December 12, 2024 in Federal Way, Washington.
David Ryder | Getty Images
Amazon is closing four more Fresh supermarkets in Southern California as the e-commerce giant continues to focus its grocery strategy around Whole Foods and delivery.
The closures will take place in the coming weeks, Amazon confirmed to CNBC. They follow the shuttering of four other U.S. locations in recent months, in Washington, Virginia, New York and a Los Angeles suburb.
“Certain locations work better than others, and after an assessment, we’ve made the decision to close these Amazon Fresh locations,” Amazon spokesperson Griffin Buch said in a statement. “We’re working closely with affected employees to help them find new roles within Amazon wherever possible.”
At one Fresh supermarket in La Verne, California, employees were told to gather for an all-hands meeting on Wednesday, according to an internal message viewed by CNBC. They learned at the meeting that the store would close in mid-November, and that employees would receive a severance package, according to a person familiar with the matter who asked not to be named because the details were confidential.
The other three stores that are closing are in cities of Mission Viejo, La Habra and Whittier.
Last week, Amazon said it intends to close 14 Fresh grocery stores in the U.K. and convert its five other locations there into Whole Foods markets.
Amazon said it regularly evaluates its store portfolio, which can lead to opening, reopening, relocating or closing certain locations. In the U.S., the company has more than 60 remaining Fresh stores. Last year, the company removed its “Just Walk Out” cashierless technology from the stores. It’s also been culling its footprint of Go cashierless convenience stores.
Amazon has been determined to become a major grocery player for nearly two decades. The company launched Amazon Fresh in 2007, then a pilot project for fresh food delivery, before acquiring upscale chain Whole Foods for $13.7 billion in 2017, its biggest purchase on record.
Amazon debuted its Fresh grocery chain in 2020, with an eye toward mass-market shoppers. The rollout has been turbulent since its early days.
The company opened a flurry of Fresh locations by 2022, but the expansion plans ran into CEO Andy Jassy’s widespread cost-cutting efforts as the company reckoned with the impact of rising interest rates and soaring inflation. In 2023, Amazon announced it would shut some Fresh stores and halt further openings temporarily as it evaluated how to make the chain stand out for shoppers.
While it’s closing Fresh stores, Amazon continues to “innovate and invest in making grocery shopping easier, faster, and more affordable,” Buch said. The company still maintains 500 Whole Foods locations and has opened mini “daily shop” Whole Foods stores in New York City.
On Wednesday, Amazon also launched a new “price-conscious” grocery brand that will be offered online and in its physical stores. And last month, Amazon expanded same-day delivery of fresh foods to more pockets of the U.S.
Jassy and other company executives have touted the success of sales of “everyday essentials” within its online grocery business, which refers to items such as canned goods, paper towels, dish soap and snacks. Jassy told investors at the company’s annual shareholder meeting in May that he remains “bullish” on grocery, calling it a “significant business” for Amazon.
WATCH: Amazon grocery could be a trojan horse to more revenue
Technology
Quantum stocks Rigetti Computing and D-Wave surged double-digits this week. Here’s what’s driving the big move
Inside Google’s quantum computing lab in Santa Barbara, California.
CNBC
Quantum computing stocks are wrapping up a big week of double-digit gains.
Shares of Rigetti Computing, D-Wave Quantum and Quantum Computing have surged more than 20%. Rigetti and D-Wave Quantum have more than doubled and tripled, respectively, since the start of the year. Arqit Quantum skyrocketed more than 32% this week.
The jump in shares followed a wave of positive news in the quantum space.
Rigetti said it had purchase orders totalling $5.7 million for two of its 9-qubit Novera quantum computing systems. The owner of drugmaker Novo Nordisk and the Danish government also invested 300 million euros in a quantum venture fund.
In a blog post earlier this week, Nvidia also highlighted accelerated computing, which it argues can make “quantum computing breakthroughs of today and tomorrow possible.”
Investors have piled into quantum computing technology this year, as tech giants Microsoft, Nvidia and Amazon have embraced the technology with a wave of new chip announcements, multi-million dollar investments and research plans.
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