PALANTIR

Palantir Technologies

Our views about the ways in which software could be built, and what it was capable of accomplishing, for years had been derided as fringe. 

We were routinely told by investors that building technical infrastructure for the enterprise market, let alone government agencies, was the surest and quickest way to run a business into the ground. Many balked at supporting us. Others insisted we should focus on catering to the needs of consumers. And many more simply would not return our calls. 

The market, however, has shifted, and quickly. 

Our business is now growing at a scale and pace that even our most ardent advocates would have been hard pressed to say was likely, or even possible. 

We generated $634 million in revenue in the first quarter of 2024 alone, representing a 21% increase over the prior year and significantly surpassing the upper end of our guidance. 

In addition, the profits that we promised would come, and that skeptics repeatedly and confidently said were beyond us, have now arrived. 

In the three months ending March 31, 2024, we earned $106 million, the largest quarterly profit in our company’s twenty-year history. For comparison, we now earn more profit in a single quarter than the amount of revenue we generated in an entire year a little more than a decade ago. 

Our central insight, and most foundational commitment, is that the software products we are building, their strength and sophistication, must remain at the center of our entire company. 

We have been investing in and refining our enterprise software platforms for years. And a growing portion of the American corporate sector is now coming to us, more aware than ever of how significant artificial intelligence and large language models will be in reshaping the industries within which they operate. 

II.

Other companies engage in intricate and elaborate efforts to sell and market their offerings. Their resources are focused on marketing at the expense of actually constructing the software and building the systems that they hope to sell. 

We have taken a different approach and are now investing even more heavily in simply letting potential partners use our software in order to decide what works and what does not for themselves. 

In the last quarter alone, we conducted more than 660 bootcamps with organizations across industries and sectors, providing potential partners with an opportunity to test and begin building on our platforms. These enterprises cannot wait for custom solutions to be built. And they are unwilling to invest in software systems that might work someday down the road.  

They need results now. And we believe that we have the only platform that works.  

Our revenue last quarter is a reflection of this unbridled and growing demand. In the period ending March 31, 2024, we generated $150 million in revenue in the U.S. commercial market alone, representing an increase of 40% from the same period the year before. And we now expect revenue in our U.S. commercial business to grow 45% or more in 2024 compared with 2023.

We anticipate that our U.S. commercial business, which accounted for 24% of our revenue last quarter, will remain one of the most significant drivers of our growth in the near term.

III.

It is anything but inevitable that our most compelling discoveries as a culture will find useful commercial and industrial applications. 

The software platforms we have built make possible quantifiable and transformative results for the enterprise. Our partners need the right software infrastructure—the underlying technical architecture that is a precondition for effectively enabling write-back functions, data lineage tracking, large language models, and more generally the handoff between human and algorithmic agents—in order to make artificial intelligence work. 

Our intention is to make our Artificial Intelligence Platform (AIP) the most dominant infrastructure in the market and power the effective deployment of artificial intelligence and large language models across institutions.  

To that end, we are working to make AIP available to an even broader range of organizations in the markets that we serve, including businesses across the United States and abroad, state and local government entities, as well as research scientists and academic institutions. 

IV.

Warfare in this century will continue to be transformed by software. 

Many fear the application of artificial intelligence in the military context, including its potential to make possible more autonomous and indeed self-directed weapons systems.  

It has been less fashionable, however, to note that software, including the systems that currently enable target selection and mission planning, has become as vital to the elimination of an adversary as it is to protecting the innocent from harm.  

The platforms in use by our defense and intelligence partners present a very real threat to the survival of our enemies.  

But those same software systems may also make possible and indeed hasten the beginning of the end of an era of total and indiscriminate war. 

Sincerely,

Alexander C. Karp