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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Microsoft Chairman and CEO Satya Nadella speaks at a press briefing on the company’s campus in Redmond, Washington, on May 20, 2024.
Jason Redmond | AFP | Getty Images
Microsoft is cutting a small percentage of jobs across departments, based on performance, the company confirmed to CNBC on Wednesday.
“At Microsoft we focus on high-performance talent,” a Microsoft spokesperson said in an email to CNBC on Wednesday. “We are always working on helping people learn and grow. When people are not performing, we take the appropriate action.”
Business Insider reported on the plans late Tuesday.
The job cuts will affect less than 1% of employees, said a person familiar with the matter who asked not to be named in order to discuss private information.
Microsoft had 228,000 employees at the end of June. While the company’s net income margin of nearly 38% is close to its highest since the early 2000s, Microsoft’s stock underperformed its peers last year, rising 12% while the Nasdaq gained 29%.
Microsoft’s latest cuts are slim compared to recent downsizing efforts.
In early 2023, the company laid off 10,000 employees and consolidated leases. In January 2024, three months after completing the $75.4 billion Activision Blizzard acquisition, Microsoft’s gaming unit shed 1,900 jobs to reduce overlap.
As 2025 begins, Microsoft faces a more tenuous relationship with artificial intelligence startup OpenAI, which the company has backed to the tune of over $13 billion. The partnership helped propel Microsoft’s market cap past $3 trillion last year.
Over the summer, Microsoft added OpenAI to its list of competitors. Microsoft CEO Satya Nadella used the phrase “cooperation tension” while discussing the relationship with investors Brad Gerstner and Bill Gurley on a podcast released last month.
Meanwhile, the Microsoft 365 Copilot assistant, which draws on OpenAI technology, has yet to become pervasive in business. Analysts at UBS said in a note last month that they came away from Microsoft’s Ignite conference with the impression that Copilot rollouts “have been a bit slow/underwhelming.”
Microsoft is still touting its growth opportunities. Finance chief Amy Hood said in October that revenue growth from Microsoft’s Azure cloud will speed up in the first half of this year because of greater AI infrastructure capacity.
WATCH: Microsoft plans to spend $80 billion to build out AI this year
D-Wave Quantum CEO Alan Baratz said Nvidia’s Jensen Huang is “dead wrong” about quantum computing after comments from the head of the chip giant spooked Wall Street on Wednesday.
Huang was asked Tuesday about Nvidia’s strategy for quantum computing. He said Nvidia could make conventional chips that are needed alongside quantum computing chips, but that those computers would need 1 million times the number of quantum processing units, called qubits, that they currently have.
Getting “very useful quantum computers” to market could take 15 to 30 years, Huang told analysts.
Huang’s remarks sent stocks in the nascent industry slumping, with D-Wave plunging 36% on Wednesday.
“The reason he’s wrong is that we at D-Wave are commercial today,” Baratz told CNBC’s Deirdre Bosa on “The Exchange.” Baratz said companies including Mastercard and Japan’s NTT Docomo “are using our quantum computers today in production to benefit their business operations.”
“Not 30 years from now, not 20 years from now, not 15 years from now,” Baratz said. “But right now today.”
D-Wave’s revenue is still minimal. Sales in the latest quarter fell 27% to $1.9 million from $2.6 million a year earlier.
Quantum computing promises to solve problems that are difficult for current processors, such as decoding encryption, generating random numbers and large-scale simulations. Technologists have been working on it for decades, and companies including Nvidia, Microsoft and IBM are pursuing it today, alongside researchers at startups and universities.
Jensen Huang, co-founder and chief executive officer of Nvidia Corp., speaks while holding a Project Digits computer during the 2025 CES event in Las Vegas, Nevada, US, on Monday, Jan. 6, 2025. Huang announced a raft of new chips, software and services, aiming to stay at the forefront of artificial intelligence computing. Photographer: Bridget Bennett/Bloomberg via Getty Images
Bloomberg | Bloomberg | Getty Images
D-Wave was among a number of companies that enjoyed a revival of interest from investors in December, when Google announced a breakthrough in its own research. Google said it had completed a 100 qubit chip, the second of six steps in its strategy to build a quantum system with 1 million qubits.
D-Wave shares soared 178% in December after popping 185% the month prior. Quantum company Rigetti Computing, which plummeted 45% on Wednesday, quintupled in value last month. IonQ dropped 39% on Wednesday. The stock rose 14% in December following a 143% rally in November.
Baratz acknowledged that one approach to quantum computing, called gate-based, may be decades away. But he said uses an annealing approach, which can be deployed now.
While Huang’s “comments may not be totally off-base for gate model quantum computers, well, they are 100% off base for annealing quantum computers,” Baratz said.
Nvidia declined to comment.
Even after Wednesday’s slide, D-Wave shares are up about 600% in the last year, giving the company a market cap of $1.6 billion.
Quantum computing has also been boosted by investor interest in artificial intelligence, the technology that’s led to surging demand for Nvidia’s graphics processing units, which use conventional transistors instead of qubits. Nvidia’s market cap has increased by 168% in the past year to $3.4 trillion.
Baratz said D-Wave systems can solve problems beyond the capabilities of the fastest Nvidia-equipped systems.
“l’ll be happy to meet with Jensen any time, any place, to help fill in these gaps for him,” Baratz said.
A sign is posted in front of the eBay headquarters in San Jose, California.
Justin Sullivan | Getty Images
Shares of eBay soared 8% Wednesday as Meta said it will allow some listings to show up on Facebook Marketplace, its popular platform connecting consumers for local item pickups and more.
EBay stock reached its highest level since November 2021.
The rollout will begin with a test in Germany, France and the United States, where buyers will be able to view listings directly on Marketplace and complete the rest of their transactions on eBay, Meta said in a release.
The partnership could provide a boost to eBay’s marketplace business, which has struggled to compete with e-commerce rivals like Amazon, Walmart, Temu and even Facebook’s own marketplace platform that lets users buy and sell items.
EBay has recently embraced niche categories like collectibles and luxury goods to try and keep buyers and sellers returning to its site. CEO Jamie Iannone told CNBC in an October interview that shoppers were coming to the site, known for its used and refurbished goods, as they sought out discounts amid a rocky macroeconomic environment.
Meta’s move is an attempt to appease the European Commission, the executive body of the European Union, after the regulator fined the company 797 million euros ($821 million) in November for tying its Marketplace product to the main Facebook app.
At the time, the Commission said that Meta’s bundling of Marketplace with Facebook could mean competitors are effectively “foreclosed” given the distribution reach of the platform. Facebook counts more than 3 billion users globally.
The Commission also said that Meta imposes “unfair trading conditions” on other online classified ads service providers who advertise on its platforms, especially Facebook and Instagram. It added that these conditions allow Meta to use data generated from other advertisers to benefit Marketplace.
Meta appealed the ruling at the time, saying that it “ignores the realities of the thriving European market for online classified listing services.”
“While we disagree with and continue to appeal the European Commission’s decision on Facebook Marketplace, we are working quickly and constructively to build a solution which addresses the points raised,” the company said Wednesday.
EBay touted its integration with Facebook Marketplace as a way for the e-commerce site to “increase exposure to our sellers’ listings, on and off eBay, as part of our strategy to engage buyers and deepen customer loyalty.”
Facebook in 2023 announced a similar partnership with Amazon that lets users browse and purchase products without leaving the app.
WATCH: Will AI stocks push higher in 2025? Nvidia investor shares his outlook
Additional reporting by CNBC’s Annie Palmer.
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