Squawk Pod: Palantir CEO Alex Karp: CEOs are Livid - 07/01/26 | Audio Only

tech resources. In fact, the whole secret of challenge here is the forward deployed model, the products that have been five years ahead. You know, you've been with me for a long time. Everyone everyone everyone said FDEs were services. They said we don't even know what an ontology is. That's the only thing people talk about now. It the secret was we delivered the best things for the war fighters. Those war fighters have serious trust issues. But it's not just the word visav frontier labs. Then you have my enterprises in the private sector who have the same issues. They're like, why would they get access to my data if they're going to build my alpha? Why wouldn't I control the weights? Why would And that's where you get this partnership. What what aligns me with Nvidia and I think is what the c technical customers want which is control over their compute their models their data stack and their alpha. They want to know they own the means of production. It's not being transferred to someone else. They're not interested in some fake deploy code that somehow is deploying tokens that transfers the alpha to a third party and the jig is up. So we have to figure out a way both pro both our our products are agnostic. We we we now sell a product to customers that allows you to switch from model to model because and we're completely agnostic but we need to rebuild trust and that trust is going to happen where everyone gets to ask ask and answer basic questions. Who owns the data? Where is it cached? Are the prompts secure? Is this being transferred to you? Are you being comp? Okay, if it was so valuable, let's say I can make you a billion dollars tomorrow, wouldn't I say, I'll make you a billion dollars and I want 30%. Why are they charging for tokens if it's so valuable?

Okay. what what I am claiming obviously slightly true but slightly self-centered is it's the model plus an application layer plus compute it is really all three so in our jargon it's the value the reason okay just look at our financials the reason why everyone is chillaxing with bad financials and growth with losing money is the client refuses to pay the true cost the two places that actually make money like profit free cash flow are our application layer called ontology and compute. Okay, what I am not just claiming we can take an open model and in the classified or non-classified context get it to the point of a frontier model but a you control the weights. So what is the true cost? Not just what you're paying. The true cost is not just is what you make minus what you lose. Meaning the value of your business. But we can get the the frontier application to be exactly the same as a frontier model without the risk of transferring the alpha of your business to another. By the way, you could do this with a frontier closed model too. But then the clients have to be able to ask and answer very basic questions. Are you keeping the data? Are you going to enter our business? What do you are in the classified context when the do department of war goes to you and says I need this application do they get to control the weights to do it or do you get to control the weights? Are we really going to outsource the battlefield of this country to the consensus view in Silicon Valley? That is effing insane. And by the way, every single enterprise in this country in private, a lot of them don't want to speak in public because it get out it gets outsourced to the neurode divergent crazy person that apparently is on drugs. The one thing I don't do uh it it okay so that's my role. But I'm telling you in this country at every single enterprise I deal with they these people are livid. They're like I am paying for tokens that create no value. These people are stealing the weights and alpha of my business and they're creating a wealth tax that does not help the poor. It just punishes starts with the billionaires. Every single person at this table is going to be paying a wealth tax only to punish us. And the reason for it is because these models have been completely over irresponsibly overs. And the sale is it's dangerous for everyone, which is why I can give it to all your adversaries, but I can't give it to the Department of War or I can't safely give it to an enterprise in this country without being certain that the alpha of that business could transfer to this model tomorrow. I.e. I have no business, no job.

the voice of American business that is being channeled through me. And I'm telling you, it is it is absolutely a problem for this country because we are on the cutting edge of every single AI technology. But if you're going to triply oversell something and the and by the way, the enterprises are just tired of it. But by the way, just a minute. I want you everybody watching this to test what I'm saying, especially investors who think somehow this is working. Pick up the phone and call a CEO in private, not in public. Every single person here can do this. Call two or three and say, "Mad Man Karp is on TV saying we're livid." I'm not going to quote you. You know, I won't quote you. You have a history. And see, they're twice as liid as me. Like,

this is this is the tragedy of it. The reality of compute plus ontology plus model changed the is changing the course of history. it. Ask the Ukrainians, ask the Israelis, ask our Department of War, ask the enterprise that are working. We do not have to oversell what we have. We have and it's all being built in this country basically except for the open models, which is a real thing coming from China, except for Nvidia open models, which are world class basically. Um, that it's all being built here. We do not have to overhype. We do not have to overhype it to the point where we're going to have wealth tax punishing,

and then and then they have to pull back on that that changes the math of all of this.

like they are the the large language models which by the way impacts your partner Nvidia because they sorry I'm talking about the they the enterprises that power this country as the most important thing. You're talking about the they as Frontier Labs and Silicon Valley. That's great. I'm focused on the enterprises of this country. hyperscalers following this I well you know I it it it depends what they're selling that's very very downstream from us we're completely agnostic we prefer a world where there are more hyperscalers where there's all sorts of new hyperscalers Elon Nvidia we like that world why do we like the world the same reason when you go online and there's you know there's 50 times kinds of coach you get to pick the one you like but what is happening among the most technical players is they're saying I want something I own this is my business. I want to own the GPUs. I want to own my data. I want to own the model. I want to control the alpha.

I'm not here. I'm literally not here to talk about what's going to happen to a very important business in the country except for obviously to some extent mine. In my business, we have much more demand than we can supply. That's like and and by the way, it may be somewhat maybe I may be the crazy person that still only cares about free cash flow, but we have more business than we can apply and we have look if you just look at our financials you can see like a uh two years out you can see 15 18 billion in free cash flow. So, are you frustrated by the stock's performance over the last You know what? I've been at this for 20 years. We've been at this talking this when we first started talking, people are like, "Is this a services company? Is it worthless?" Yeah. The the the markets are short-term, very fickle, and also quite frankly where I would throw some shade, what investors actually understand tech. They think because they're very high IQ and they understand certain things, they understand what they're using. Basically the fault of investors is typically I use it therefore it's valuable. Yeah. What an enterprise uses that's doing complicated manufacturing or pharmacological research or putting a bomb on or bringing special forces people home safely very different than what you're using.

Yeah, you you look first of all honestly the one thing that I am slightly frustrated about these these when when when open AI or anthropic especially are talking about critical infrastructure it only is being used in our product my product and there's a reason for that these things are very very valuable what what what they have done it building models is world historic and just so you see I'm not throwing shade Dario is a literally historic figure and He he came from behind and he's now number one. Almost no one in the I I've been in business whatever you want to call I do for a long time. Never seen anything like this. Okay. So the reality is critical infrastructure does not run these models without an application layer. In almost all cases and maybe it won't be all cases someday that application layers are ontology. That's a fact. And there's a reason for it. It's not that as you know some people love me some people hate me. They're not buying they're not buying it because of that. they're buying because these things have to be made safe. And the I I'm going to trust you. You should trust me because I've never lied BS thing that just doesn't cut it at this level. And and enterprises are run by the shrewdest American enterprises are run by the shrewdest, most widely intelligent people on the planet. If you think they're going for that, you can go try to sell me like my my parents still want me to get a job as a faculty member at Berkeley. Go try to get me a job at Berkeley. I'm very qualified. It's not happening.

Look, philanthropic open you really have to make the one of one of the things we're really trying to get the west to do is move away from like not liken. These are very technical. What does the model do? Who is restricted to do? I would say it is a loser to restrict something from the government because you don't agree with how the government fights war and then open it up to the world including our adversaries. Go sell that to the American people where they already don't like you.

There are two there are two relevant tech centers on two and a half. America, China, Israel. Those are the tech centers of the world. And we like I spent half my life in Europe. I want Europe to be relevant. the re and and Sweden has a real tech scene. There's you have to be can't just like you know but the relevant tech centers uh we are we have a peer-to-peer adversary in China. China has lots of advantages including quite frankly we have to find ways to make these models raise the standard of living for every America and we need a sense Americans need to have a sense it's not just the people at this table people watching it getting rich and there are real issues there and we have and then we have left and right far left far right gone completely nuts you would think that the greatest problem in the world if you were on the far left is somehow it's like if things work it's evil and bad By the way, I've been wholesale kicked out of my own party because I warned that this was going to happen on the left and it is happening. Then you have on the far right like it's like on both sides you think the biggest problem of our society are like warlocks roaming the street building technology. They of course they can't understand it. Like they attack Palentia for the craziest. China doesn't have that problem. But it also doesn't have the creativity, ingenuity and and deep tech uh uh creativity we have. But the reality is it's not a foregone conclusion that we win that we have we have the biggest problem in this country on these debates is we debate these things as if we don't have adversaries. It's not actually true. It's binary. They will win or we will win.

the the the the is like so many things. I am the most publicly supportive CEO of Israel and that's true. Uh I think Israel is a is is on the side of good now in private because I have a I'm known there to be fair. I'm probably also the most effective critic of like hey I didn't agree with this without going and I would be very happy to be more in public about that except for I think not all. There are many legitimate criticisms of Israel and every other country. Although I would say, do you want a a country that can sometimes be difficult as your partner or do you want a country or do you want partners that have no tech seen as a partner? And so like it's like in this world having a a fully adult independent aligned country that doesn't always agree with us is much better than what we somehow have in Europe. Like that's we do not want that. Yes. Okay. So um look, America and Israel will always have will never be fully aligned and that's totally okay. My position is they are a very important partner and we are proud to support them and in private you can bet your last dollar I call and complain about a lot of things.

Well, look is I I don't Israel I'm going to leave the I'm going to leave the Israeli thing for my talking to them in private because I just don't think at this point it's very hard in public to talk about them because you just have people look they're legitimate criticisms of Israel. Half the people criticizing Israel just don't believe it should exist and that's just a fact. And so like I'm not gonna like totally play into their hands by saying things I say in private. In America, America has to rep his own interests. Do I think Iran's been degraded? Yes. Are are there things that I don't think are in the public space that would be comforting to people if they are? Yes. And I'll leave it at that.

Thank you.

Thank you. Have to get up from the seat. Yeah.

No,

No, not like your party. We want you to We want you to stay. Can you come back tomorrow?

Yeah. No, I'll come back. I I really do appreciate you guys.