How bad does the world have to get before Palantir is happy? In the sunny US tech sector, the software company stands out with its doom-laden warnings about global instability. Artificial Intelligence could be the crisis he’s been looking for.
These are high times for cynics. Artificial intelligence is being touted as a dystopia in the making. In meetings with technology companies I keep hearing the phrase Oppenheimer moment a reference to Robert Oppenheimer, the physicist who led the creation of the atomic bomb.
It’s still unclear how exactly generative AI could destroy us, or what kind of fortune it will create. But all this talk of extraordinary power is proving to be extremely valuable to the value of a handful of companies. This week, the market cap of AI chipmaker Nvidia briefly hit a trillion dollars. AI startups like Character.ai and Anthropic continue to raise money even as funding elsewhere dries up. The price of Palantirs shares has more than doubled in the space of five months.
This week, Palantir made its new AI platform widely available. The tool can generate conversational responses using the kind of large language models, or LLMs, that power chatbots like ChatGPT. Because it’s based on specific customer data, it should avoid hallucinating the false answers that plague other chatbots. A demo available on YouTube shows how it could work on the battlefield, helping identify an enemy tank and offering suggestions on how to target it. The company says Ukrainian forces are already using some of its initial features.
Palantir isn’t the only software company racing to show how generative AI can be used for something more productive than writing college essays. IBM also announced a new AI platform called Watsonx. But this year, IBM’s stock price has fallen.
Palantir seems to do a better job than most articulated real-world uses. You need a core set of technologies that allows you to bring these LLMs into your business to work on your data, said Shyam Sankar, Chief Technology Officer. And then you need a really strong level of governance control that allows you to build trust in AI.
It helps that AI-style puzzles and existential threats are Palantir’s stockpile. It’s hard to think of a company that talks more about disasters. Last year, he warned that the world was underestimating the threat of a nuclear attack, which he pegged at about 20-30%. Silicon Valley co-founder and investor Peter Thiel is known for making his disturbing statements about global annihilation. In 2008 he described what he called the re-emergence of an apocalyptic dimension in the modern world. While the 20th century was both great and terrible, he wrote, the 21st century promised to be more of both. Fears about artificial intelligence fit perfectly into that worldview.
What does Palantir actually do? The $31 billion company has sometimes been described as the engineers’ answer to management consulting. It was created in the aftermath of the 9/11 attacks to create software that could be used by intelligence agencies to counter terrorism before expanding to other government departments and businesses. Its software analyzes data, aggregates information, finds patterns, and presents them in ways that are useful and easy to understand. He says his services have helped BP cut production costs by about 60%. It is also the frontrunner for a new seven-year NHS contract worth up to £480m.
Over the past couple of years, however, Palantir has also been a somewhat cautionary tale of what can happen when a company known for working in the shadows steps into the light. Named after the dark, forward-looking crystal balls from the Lord of the Rings trilogy, it has made a virtue of secrecy for a long time. The idea of a strangely omniscient tech company was irresistible to the media. In 2018, a Bloomberg article claimed that the company knew all about you. A couple of years later the New York Times asked if he had seen too much.
CEO Alex Karp has done a good job keeping Palantirs eccentricities at the forefront. He is known to love German philosophy and has described his desire to work with creative and quirky people. When I was in the company’s Denver office, I saw a glass case displaying a drab business suit with an emergency stop sign.
Some of the allure faded when the company went public in late 2020. Suddenly it was subject to the platitudes of quarterly earnings reports and investors who want profits that meet generally accepted accounting principles. The inconvenient truth is that in 20 years Palantir has never made an annual profit. This is expected to be the first year he breaks that spell.
Interest in artificial intelligence has given the company back its appeal. Add in new profitability and the result is stock price turmoil. It helps that the zeitgeist is catching up with Palantir’s way of thinking. If AI is indeed hurtling us towards oblivion, don’t expect Palantir to act surprised.
elaine.moore@ft.com
#Artificial #intelligence #Palantir #mystique