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Palantir Wins $250 Million AI Deal with US Defence Department

Palantir Wins $250 Million AI Deal with US Defence Department

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A brand-new $250 million artificial intelligence agreement for the U.S. Army would help Palantir Technologies (PLTR), claims a financial professional who rates the PLTR stock underperform. On Wednesday, following the news, Palantir’s stock increased.

Palantir Wins $250 Million AI Deal with US Defence Department
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“While this contract adds fuel to the argument that Palantir is more like a government service provider, this contract bodes well for Palantir’s fourth-quarter and 2024 revenue,” William Blair analyst Louie DiPalma said in a note to clients.

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The U.S. Army has a three-year agreement for research and development operations.

Military leaders have praised the possible combat uses of machine learning and artificial intelligence, and business has matched the enthusiasm. Interest in these technologies has grown in the defence community in recent years.

The Government Accountability Office, a government watchdog, said that as of 2021, the Defence Department was managing over 685 AI-related projects. A minimum of 232 were under Army control.

Today’s stock market saw a 6.4 percent rise in PLTR stock, which closed at 14.85.

If the firm is awarded a new contract by the National Health System of the United Kingdom, the price of PLTR stock might increase further. Throughout the coronavirus crisis, the NHS employed Palantir. Now available is a larger deal valued at around $595 million. A choice is anticipated in 2023.

Palantir has worked with government clients to employ AI techniques for the military, combating terrorism, and gathering intelligence. Additionally, such artificial intelligence created prediction models by using pattern recognition.

Generative AI is currently being included by Palantir in its software system.

Generic artificial intelligence models analyze “prompts,” such as internet search terms that specify what a user is looking for. Technologies that use generative artificial intelligence independently produce literature, pictures, videos, as well as computer code. Palantir also wants to offer generative AI technology in industrial areas like the healthcare industry.

Early this year, Palantir unveiled the “Artificial Intelligence Platform,” its latest product. Palantir reports that the AIP has 150 consumers as of the middle of September, an increase of fifty percent over the previous month.

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Palantir has also not provided pricing information for its generative AI solutions. Analysts claim that this makes the possible income rise from the AIP uncertain.

On August 1, PLTR stock reached a 52-week intraday record high of 20.24 as AI shares pushed higher. The PLTR stock, however, has now fallen from its 52-week high as of September 27. However, Palantir stock has grown by 124 percent so far in 2023.

Palantir Technologies

Palantir Technologies – A Software Company Whose Products Are Used For Counter-Terrorism Analytics.

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Based in America, Palantir Technologies is a software company which is specializing in big data analytics. Peter Thiel, Nathan Gettings, Joe Lonsdale, Stephen Cohen, and Alex Karp founded the company in 2003. Currently, the headquarters of the company is based in Denver, Colorado, and Alex Karp is the present CEO. Palantir is famous around the world for three main projects, namely, Palantir Gotham, Palantir Metropolis, and Palantir Foundry.

United States Intelligence Community and United States Department of Defense use Palantir Gotham for counter-terrorism analysis. These main three products of Palantir are used by many big clients such as Morgan Stanley, Airbus, Fiat Chrysler, etc. Palantir’s customer base has expanded to healthcare industries and it also works closely with the local and state government.

Early Years of Palantir Technologies

Peter Thiel originally founded the company in 2003 with a single mission to combat terrorism by developing suitable software. After a year, Peter bankrolled a prototype creation and built a team that included a PayPal engineer, two students from Stanford University, and one of his former colleagues from Stanford Law School. Peter made this former colleague (Alex Karp) CEO of the company.

When the company was founded it was headquartered in Palo Alto, California. In the initial days, the company struggled to land investors. Firms like Sequoia Capital and Kleiner Perkins turned them down and demoralized them by saying it was going to be an epic fail. After trying for some time, they received an initial investment of $2 million from In-Q-Tel and then Thiel invested $30 million from his pocket. After receiving the funding, it took three years for Palantir to complete its product. Thiel realized that only artificial intelligence was not enough to build what he was aiming for so he hired analysts who can explore data from multiple sources.

Palantir Technologies
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The Success of Palantir Technologies

The company made breakthroughs in 2009 and 2010 when Information Warfare Monitor used the technology of Palantir to uncover the GhostNet and the Shadow Network. Both of them were Chinese espionage that targeted the compromise of several computer networks across 103 countries including Dalai Lama’s office. The Shadow Network hacked into the Indian security system and defense apparatus.

In 2010, Palantir started a joint venture with Thompson Reuters to sell a quantitative analysis tool, QA Studio. The same year, Recovery Accountability and Transparency Board fought fraud by deploying Palantir software. After this success, Biden announced at the White House that further the company’s software will be incorporated in other government agencies including Medicare and Medicaid.

By 2013, several US government agencies used Palantir software for fraud detection and combating terrorism. Initially, the company which struggled to receive funding from private capital firms secured a funding of $196 million in 2013. In December 2014, the company hosted another round of funding from which it raised $450 million from the private funders. The company was gaining a lot of attraction and the number of customers increased rapidly, but Alex Karp decided to not file an IPO. He said that a company like Palantir would become difficult to manage if it goes public. At the end of 2013, the valuation of the company became $9 billion.

Present Days

In the upcoming years, the company gathered more funding and its valuation became $20 billion in 2015. The company also acquired two startups, Kimono Labs and Silk to collect information more efficiently. In 2020, many countries used Palantir technology to track and contain the spread of COVID-19. The company recently developed software called Tiberius that is used for vaccine allocation in the US.

Alex Karp – CEO of Palantir Technologies

Alex Karp is a famous American billionaire whose net worth is $2.1 billion. He went to Haverford College followed by Stanford University, and Goethe University. He studied neoclassical social theory in college. Apart from co-founding Palantir Technologies, Alex is also the co-founder of the money management firm, Caedmon Group.