All right. Hello everybody. Welcome back to another episode of Basis Points. We are here live at Zeta Live with the CEO and co-founder of Zeta, Mr. David Steinberg. Thank you for taking the time.
Oh, it's great to see you guys. You know, I love being with you.
So, real quick, the event's amazing. 3,000 people.
Could not. Your team is amazing. So, let's just give them their flowers because your team has done such an incredible job that this event is great. So, congratulations.
Thank you, Steve. I'll tell you, I'm so proud of the team. A lot of stuff comes together a little later than you'd like, but it's been, you know, just so far today a home run. So, I'm going to start it off with when I see the people that are here, it's not people like admitted. You're talking about CMOs are here. Talking about decision makers that have direct lines to their board of directors and CEOs about why they should make a decision.
Oh, we have a lot of CEOs here, too.
A lot of CEOs. You got a lot of CFOs here. Just you got CTOs here. This is if you had one message, what would you want them to leave with really capturing your day?
Let me start by saying that I know there's been talk online, oh why would I want to see somebody carrying a ball or so on and so forth. You bring the athletes, you bring the movie stars, you bring the rockstar entrepreneurs. That brings in the customers.
That brings in the potential customers. In the room today is $200 billion a year in decision makers for marketing and technology today.
And usually those celebrities and athletes are involved in marketing and decision making.
Of course. And when you think about it, it's funny. Last year, for every dollar we spent on this platform, we generated booked business of 10 times that amount.
This year, I think we'll do better than that.
Love that. So the reality is the message is why Athena operating system, why AIM, why ultimately other things. How do we continue to drive a higher return on investment for our clients than anybody else bar none? 600 to 700% on marketing spend goes up dramatically in an AIM environment. It goes up even further when you get to the chip level. 297% confirmed return on technology spend today. That's what I want CEOs to hear, CMOs to hear, and CFOs to hear.
Athena OS, that was one of the major four announcements today. What is the new trajectory that you think this can lead Zeta onwards towards because it's not just about marketing intelligence anymore. It feels like it's much more broader than just marketing for a company.
It is. Well, we've moved out of marketing, you know, a number of months ago and really added the business use case. That's what drove this, right? So when you added the ZBI, what happened was perfect example, we had a client, we're doing a tremendous amount of marketing for them around skirts in the Northeast for women because that's what the demand was. Problem was all the inventory was in the Midwest.
So now all of a sudden you put together a system where inventory can know where the demand is before it's there. Let's take it a step further. You can then use that for manufacturing, right? What is the demand to what do we need to make? Then you can use it for the best logistics. You can adjust weather. You can adjust everything that's necessary to make the entire system work. Each decision makes the next decision smarter. So when you look at return on investment, our goal is to be the highest return on investment across technology and marketing for our clients. Bar none.
And I think that was part of the relationship you guys expanded on today with Palantir bringing their ontology together with the Zeta ecosystem. Karp was on stage. He doesn't go to many conferences. So he does not and he is let's just stop and say how amazing.
He was incredible.
Dr. Karp is an incredible individual and just incredible. And to call him a friend. I mean I don't know if you heard I thought my epitaph would be his line from the press release that you know it's an honor for Palantir to work with Zeta.
Yeah. Right. My new epitaph is David Steinberg's really funny in public, but he's much funnier in private. I was like, that's a compliment. He's that was, you know, he's very funny.
Yeah. And I tend to be very funny. So, we have a good time together.
So, I got to ask you, we learned a lot of things. We tried getting it out of you last night. You did not break. It's like you were trained by the CIA. You did not break. We tried. But I got to ask with what I saw Palantir Foundry rearchitect and one of the things I told you originally why I became an investor is because of your speech where you redeployed 400 engineers and you said to the board of directors which is not an easy thing to do even if you founded the company we made $50 million this year in EBITDA and we're going to make zero for the next three years because we have to re-engineer everything for the future.
I want to know specifically how the chip fits into this whole flywheel and give us really the insights behind this decision.
And let's also back up and say you guys announced that you're working with a company to develop a microchip.
Yeah, let me make this very clear just to be clear. We're working on a microchip with a third party manufacturer who's going to put up all of the money to make the chip. This is not going to affect our free cash flow. I know that's created some confusion in the marketplace. When you look at our business last quarter, we grew topline by 44%, free of EBITDA by 56%, free cash flow by 73%. Yeah, I think we're going to continue to grow our free cash flow at very, very high percentages. This chip will not affect free cash flow. It will not affect our share buyback and it will not affect our ability to create cash to buy new cool companies. We have a manufacturing partner who's going to make it. We'll have another third-party company to buy the chips from them and host them and then we will use those chips on demand exclusively.
So, it's a very differentiated type of relationship. I probably should have been clearer about it online because I think it's created some major confusion in the marketplace.
No, because the market sees capex, chips, all this stuff. So, it's a fair point.
People saying, "Oh, they're going to put all their free cash flow into making a chip." That is absolutely not the case. Why make the chip? Today we drive 600 to 700% return on marketing spend, 297% return on technology spend. The chip will speed everything up.
Okay, that speed will help us. What's our goal? I've been very clear. I ultimately want to get to 10 times return on marketing spend. How do I get to a 1,000% return on marketing spend? And how do we get to 500 to 700% return on technology spend? We do that by getting deeper and deeper into the infrastructure level in a way that doesn't cost us any money.
Is this going to be part of the sovereign AI ecosystem as well?
100%. This all sits on top of Foundry. It's going to be in partnership with Palantir. Their FTEs are helping us all along.
Well, Elias told us that you guys have developed a very strong relationship over the past couple months and the outcomes-based methodology that you both have when approaching enterprises. That's what makes this special.
It's almost crazy when you look at a guy like Elias, you look at a guy like Dr. Karp, Alex, and me and we're just totally aligned. The organizations are totally aligned. Our FTEs are now going into deployments together.
Yeah, that's what he told us, right?
And it's been just unbelievable.
Can you talk a little bit about the Neotron Nvidia partnership?
Yeah, listen, we're going to run these inference models on Neotron in partnership with Foundry. I'm sorry, but it's on top of Foundry. It's been a very long day. In partnership with Fireworks AI. And you know, listen, if in the first nine months of the year, we'll have now announced partnerships with OpenAI, Snowflake, Palantir, Fireworks, and Nvidia.
So, you know, it's we need to do some more. It's been a slow year.
We need a fifth announcement today.
Mr. Steinberg, I have someone else who actually introduced me to your company.
Mr. Steinberg, Jesus, this is now I really feel old and formal.
This person introduced me to your company and he has a question. So, I would love if he could ask a question right here.
Davis, good catch, Davis. That was very all day.
Okay. So, well, thank you for letting me be here and have the opportunity to even ask a question. My question kind of I want to probe into the Palantir partnership a little bit. We know that Palantir opens up many more doors beyond commercial and that's kind of what Zeta focuses on is the commercial sector and I know you have the Zeta economic index which tracks consumer data.
But do you see a pathway into the public sector where yes, for example, Zeta might help the Fed?
Yeah, we're already working on stuff.
No. Did you see my introduction to Karp today?
What did I say in addition to commercial country?
He may have said I said countries in my introduction. I said enterprises and countries.
And you may have hired somebody.
Well, you guys track we hired.
You may have hired somebody in the past couple of days that is very influential overseas and may be from a very large company that may know a thing or two about countries.
Yeah, we're Listen, I see a public sector business for us. We're already building it and I think it's going to be something that's very interesting.
Love that. I love how you're expanding, expanding fast, doing it with the right people.
It's an amazing journey to be on, honestly.
I'm excited to be on it. We love having you guys with us. How was Benjamin's last night?
I told you best steakhouse in Manhattan.
No, no, no. See, that's We're going to both there and Peter Luger's. We're going to end the debate.
I have to agree with Steve Luger's the day before the first time unbiased opinion better.
I'm just telling the 86 and Fort Charles are both pretty good too.
So I have a question about OpenAI.
As you know our group tends to speculate a little bit and we tend to dive into things much deeper than most people. And one of the things that we have been thinking about collectively is for OpenAI to reach a lot of the projections people are expecting. They have this real estate and if you look at Amazon they built a hundred billion dollar advertising business. Your eyes are lighting up right now out of nowhere over a two two and a half year period. And I think and other people think that in order for OpenAI to hit the revenue projections as expected of them for the amount of capex that they are allocating that they're going to have to utilize their retail space. And when you think about where Anthropic and ChatGPT from OpenAI are, Anthropic is really enterprise level, ChatGPT is consumer level. So are you going to be a little unfair?
We already are serving ads through there too. So, we're serving ads there today. I think we're I'll be careful here. Yes, we're serving ads. It's a very meaningful and growing partnership and I think it could be very very big. But I think it's unfair to just call OpenAI retail.
So, let me phrase that from a coding aspect. Anthropic has majority of coding and ChatGPT has just huge consumer.
I think once again they I think they both have a lot of both. I've got to be a little careful. But to your point, OpenAI has made the decision to go into advertising and Anthropic has not.
So that's a major difference and I've said publicly that we are partnering with them and we are actively serving ads into OpenAI. It's growing very quickly and I think it's going to be a very interesting partnership.
And by the way, the Syno AI deal is going to be very very important there.
David, thank you for your time today. Last question for you. What do you think, and you've spoke about this before, but what do you think the marketplace in general misunderstands about Zeta? I mean, this event is amazing. You've got thousands of people. I think the event and the company's brand has progressed so much over the past year. What do you still think people don't really understand about the culture of this company?
I think first people think we're an advertising company, which we've never really been. We were a marketing technology company. 60% of our revenue is subscription. 40% is utilization. You know what they call utilization this week? Tokens. Yeah.
Right. I mean, we don't call it that with 120% net dollar retention, right? I mean, your gold standard is 100 net retention. We were at 120 last year. You could look at all the different metrics and we perform ahead and then we make a mention about chip and then all of a sudden everybody's, "Oh my god, they're going to spend all their cash flow." It just some of the noise that comes out just makes no sense.
Now, it creates opportunities.
Yeah, because if people don't understand what's really going on, others do. The opportunity is there.
That is correct.
But what I would tell you is that we are building the next generation of AI-driven software company. We are going to build a $10 billion a year business at a 30% plus operating margin with the vast majority of that falling to free cash flow. And anybody who's betting against us is in the end going to probably lose. But what I'll tell you is different moves on a day-to-day basis, week-by-week basis are not as relevant as how do we build a hundred billion dollar business and that's what we're working for.
Well, I wouldn't bet against you, especially with what I'm seeing except on Luger's.
Oh, that I'm not even betting. I'm correct on that.
David Steinberg, thank you so much.
Hello everybody. Welcome back to Basis Points. We are here live from Zeta Live 2026 in New York City. We are here with someone very special, Mr. Elias Davis of Palantir. Elias, thanks for sitting down and doing this.
Of course. Thanks for having me. Good to see you, buddy.
And before we get started, Emid is making us wear the headphones and it is weird. Is it not weird?
Yeah. Yeah. I feel very uncomfortable. But anything for my guy here?
Everything is amplified in our ears right now.
Basis points in the future. We'll have headphones.
The biggest smile I've ever seen because it makes us uncomfortable. So makes it all better. He's like, "Steve's uncomfortable. We are doing this when we build the studio."
Elias, yes. I've known you for a while now.
You are a rockstar at Palantir. You get things done. Steve and I have been covering Zeta for the better part of about a year now. Around November, December 2025, we got into it few months ago. One of the companies we've been covering for 5 years decides to partner with Zeta. Palantir doesn't really do that many partnerships, especially with companies in marketing intelligence. How did the partnership actually start?
Yeah, it's a great question. First of all, thanks for having me. Good to see you guys.
How do you get all started? I think I forget exactly who actually got connected or who David connected with originally. But in very typical Palantir fashion, thank you for the compliments. Luckily, it's not just me. Everyone at Palantir is a rockstar. Got a note from I forget if it was KK or Karp or whoever that might be. And we were off to the races. I think David had originally got connected to I forget exactly who, but had a couple cycles.
Didn't exactly go where everyone intended it to go and then and I'm never going to forget it. I went to his office on Park Avenue. We sat in a room for 45 minutes and we walked out shaking hands sort of kind of with the details of the deal figured out. And then we were off to the races. I think he said on a podcast that we're tied at the hip. So yeah, my wife is a little jealous, but it's been great. He's an incredible individual as you guys already know. And in very typical Palantir fashion, sure we'll talk about what the partnership and its foundation is all about. But ultimately it comes down to the people. You've covered us, you know us super well. Obviously you know everyone at our company. Everything we do with a third party company, partner, customer, whatever it might be, it really starts with the people. Do we like them? Do we align with the same values, same mission? And every single conversation we had with David 100% aligned with that. And obviously we saw Dr. Karp and David on mainstage open the show up this morning. They really really like each other and obviously that helps with making sure the foundation's strong and things are kicked off in the right way.
It's exciting. It's a seven-year partnership.
And David Steinberg is known for ripping out and just redoing everything. Prior to 2020, he deployed 400 engineers to rip and replace the system, and now they're on Foundry. So, I can only imagine what this is going to look like.
Yeah. Look, I think the beauty of the first meeting we ever had was that there was no expectation that was set. And so I think very similar to what you just said, David is the type of human being who thinks from first principles, similar to the way that we do as an organization. And yeah, I mean through that 45-minute meeting and I can sort of kind of walked you through some of it, the whole vision of what this partnership would look like was sort of kind of orchestrated. And obviously now for the last few months it's been a lot of hard work from our team, our forward deployed engineers, their version of forward deployed engineers as well. And then obviously me and David running around doing what we do to make sure that this is as successful as obviously it has been. Obviously their stock has been ripping. Thankfully ours has as well. It's always nice when a company partners with Palantir and the market genuinely recognizes the value that could be there.
I mean Palantir may or may not went past 200 this morning.
I saw that. I saw that. Let's talk deeper about the synergies of the partnership. So Zeta is marketing intelligence. Palantir is much more broader business intelligence at a very deep layer. One could argue that in this AI revolution, the models are important, but the orchestration of the models is really what's important. Dr. Karp was talking about this back in 2023. That thesis has started to play out. How do you see marketing intelligence from Zeta and their relationship with many customers in the Fortune 500 working with the integrated stack on Palantir? Where does the synergy lead to business outcomes that are differentiated for customers on a marketing and a business side in the general operations that Palantir works with with the ontology?
Yeah, absolutely. So I think the first question we had to ask ourselves in that meeting that we sat down for 45 minutes was what is this really going to be all about, right? We can do a bunch of press, our stock will probably go up, but unless there's strong foundation to the actual use cases and the groundwork we have to lay that makes this partnership strong that won't sustain itself long term. Right.
And so I think the question we really had to start asking ourselves is what primitives on Foundry are core to benefits that we can drive for Zeta customers. I think if I distill it down to two main areas where the partnership focuses, one is the acceleration of onboarding. Obviously I'm AIT knows this super well but the data connectors the billions of dollars of R&D that we at Palantir have put into building Foundry and getting it to where it is today is obviously extremely difficult to replicate impossible to replicate some would say and so obviously that is a key part of this right the onboarding process the acceleration of that onboarding process for Zeta customers just accelerates the path to value creation. Now touching on what expected value Zeta customers intend to see ultimately the foundational value proposition for Zeta is leveraging their data and Zeta's proprietary data that they don't sell that hundreds of millions of users opt in for to drive marketing ROI. And so when you distill down the primitives and first principles of what Foundry is ultimately it's the acceleration of go to market and or onboarding then go to market with data connectors ingesting all the data creating that ontology so that the Zeta customers have a 360 point of view of where their data sits how they can approach different campaigns and then ultimately the integration of that with the Zeta cloud platform is ultimately what drives and accelerates the path to the expected 600 700% ROI.
Exactly. So, it's almost like if a customer wanted to sell a water bottle that was like a really cool water bottle, they need data from Zeta on who is this type of person maybe that goes to the gym often, maybe that's into these like niche water bottles that would actually buy this, but they also need the supply chain of how to build that water bottle and that a lot of that stuff comes from Palantir's ontology. So, do you think that's a clear example of how like you need the marketing intelligence on who's going to buy it? you need the logistical operational intelligence of like where we're going to source the water bottle parts from. And putting that together is where you get a much better return for customers and quite frankly a much better return for the company that's trying to optimize revenue and decrease costs.
100%. And actually I unfortunately can't disclose the name of the customer, but I think this is like part two of what this partnership stands for. We're working together to go to mutual customers and Palantir commercial customers to actually provide this offering to them. I'll give you a perfect example and I think you touched on this a little but if we Palantir on the commercial side started a lot of the use cases in global supply chain right and so if you think of a very very very large publicly traded consumer-facing product goods business obviously you can leverage Zeta's proprietary data and the customer's data to drive increase in ROI and user acquisition yes but ultimately you can't actually deliver that product to that end consumer after you acquire them unless you have visibility and unlock all the bottlenecks in that global supply chain which obviously is powered by us on our end which is why everyone's like go to market do we really do that ultimately everything happens at Palantir because it makes sense for our customer if we can help drive incremental value to the bottom line to our customer in this case both on the marketing user acquisition side as well as the supply chain it ultimately allows the acceleration of delivery of the product to the end consumer which obviously drives incremental unit economics for our business as well as Zeta's.
So what can a new customer expect? Palantir revolutionized the RFP process. It revolutionized actually doing an implementation from what could take 6 12 18 months to several weeks. When you combine the Palantir supply chain and Zeta marketing and how implementation now is Zeta service 51 out of the top Fortune 100s.
For those 49, what would the message be to them that aren't using it yet?
Absolutely. So I think I'm not 100% if Zeta sort of kind of took this from us or sort of kind of did it themselves. Either way is fine. But the idea here is like the actual go to market process is very similar to ours now, right? You do a small pilot boot camp, agent camp, whatever the thing might be within a quarter. How do you do two things in parallel? convince a customer to try it and have the technology slash the actual integration piece align with the process of onboarding go to market value creation. How do you do everything within a quarter? Obviously we're public obviously they're public obviously their customers many of their customers are public everyone wants to value you know that super well.
We're just helping make that happen. And so if you're a prospective customer for Zeta, I think that we have to think about it is do I spend a lot of money on marketing? Am I optimizing that spend am I utilizing all the data that I have to accelerate the economics and catalyze the economics for my core business. Let's try it out. And it's not similar to the way we say this. It's not like let's try pilot 6 to 12 months. throw hundreds of millions of dollars.
It's an old way of selling software. It's done, right?
It's done. It's done. And I think I didn't catch all of the news and announcements that Zeta reported at opening this morning, but I think there's a lot of forward-looking perspective of new markets at Zeta in partnership with us are looking to break into to revitalize the market of what this new vision for software looks like which we're obviously very very excited to support them on.
Yeah. And it's, you know, Palantir fundamentally changed the go to market approach for software. Fundamentally changed what it means for a company to be able to grow in particular, forget the topline growth of 90%, but the operating margins like you just don't get software companies that are this efficient. And I think the exciting thing for me and Steve when they partnered with Zeta was like, okay, Zeta's hitting the inflection point of operating leverage. If they had a Palantir partnership that could probably supercharge what it means, you know, rule of 180, but like to get those types of numbers, you really need the type of characteristics that you're talking about. Dr. Karp doesn't really go to these events and speak live on stages. He's a very busy man. He has a lot of things going on. He's running a half a trillion dollar company. So, it's obviously hard to get his time, but he came to this one.
What is so special between Dr. Karp's relationship with David Steinberg that actually compelled him to come to this event?
Look, I think it's not an artificial relationship. It's not transactional. I think ultimately I hate to say this but in corporate America people do business and sometimes most of the time it's transactional. You know Dr. Karp better than most people. He does things he enjoys. He does things with people he likes to spend time with. The relationship is genuine. He was asked to do it and he was excited to participate and obviously we all saw it this morning.
It's absolutely incredible. Last question for you guys. Thank you so much for taking the time to do this. You do a lot of stuff at Palantir. When a partnership like this comes into place, what is your role? Like are you managing relationships? Are you like trying to understand the financials of it? How are you as a rockstar at this company working with other rock stars to make a rockstar deal happen?
I mean look, I think it comes down to the origin of every Palantirian, right? like all of our jobs are to create value for our own respective organization and the customers that we work with, our partners that we work with. And so whether it's, you know, being on a bunch of podcasts and fireside chats with David, working on the go to market piece, to make sure that this partnership is successful and that obviously everyone is extracting value from the hard work that our teams are working on overnight or around the clock. working very very closely with our forward deployed engineers that are on site in Zeta's office collaborating on a lot of the hard work to actually make all of this possible. A lot of what we discussed this morning but it comes down to the same thing. David and I I'll sort of kind of loop it back to where we started. He's an incredible individual. I look up to him a lot. I've spent a lot of time with him. I've added a lot of value to him. He's done the same to me. And that's what makes a lot of what this partnership is about very special for us as well as I think for them.
Yeah. And that's how business should happen. You should like working with the people that you're working with.
Thank you for having me guys.
Thank you. Thank you very much.
Oh wow. Everything sounds better now.
It actually wasn't that bad.
Thank god that's still rolling for you saying that.
Oh my god. It actually sounds a little better now. Yeah. Can I get a clip of just when Ahmed said that at the end?
Hello everybody. Welcome back to another episode of Basis Points. We are here live from Zeta Live with the one and only the man, the myth. I think we got to say he's a legend on Wall Street. Ladies and gentlemen, Dan Ives.
Dan Ives. Great to see you.
So, Dan, we met back in 2023 because you were the first Wall Street analyst. Isn't that crazy? the first guy and look at everybody jumped on the bandwagon now. The first guy on an institution that is responsible for tens of trillions of dollars to say, "Hey, I think Palantir at $15 looks kind of compelling." Honestly, this year I think you were one of the first couple people to say Zeta is kind of interesting and you did an interview with Steinberg and said maybe this company is something that people should look at. What has it been like over the past seven months in terms of the progress you've seen from the company?
Yeah, I mean, you know, and obviously as an advisor for David and Zeta, look, I mean, my view is this in this AI revolution, there's going to be so many companies and I'd say obviously Palantir being the first of them, but it's really about like the second, third, fourth derivatives that are happening across AI. And I think like if you look at like with Zeta, I think obviously the Palantir announcement, which is so important.
And so many others where I think it's a good example of in the SaaS apocalypse whether it's Zeta or so many these other ServiceNow, Salesforce, ServiceNow, Adobe like software companies definitely have structural issues but you cannot just label like if you look like what Zeta does from a marketing perspective and how integral they are from an AI strategy customers they're not everyone that's here they're not going to Zeta because they think that they're going away to some extent. It just speaks them to spend more and more money, right, in terms of with the Zeta platform as they embrace AI.
So, let's talk about that what you just said. You know better than anybody. My biggest thesis for Palantir was net dollar retention when nobody was talking about it and we had that conversation on Basis Points and I think the net dollar retention at that point was 146%. Maybe I'm wrong. Maybe it was 138. I don't remember exactly what quarter it was.
Yeah, it was somewhere right in that area.
And you look at what Zeta is doing and you look at the 20 beating and raise quarters. You look at all the underlying metrics and you look at that net dollar retention at 120% right now. It still gives me Palantir vibes from several years ago because it just looks like it's going to expand, especially with what they announced today. How are you looking at this?
I think look for Zeta it's about install base. you're gonna have new co but it's like the opportunity for them is really and look and David they've laid out everything you know here at the conference and obviously a lot of the announcements it's just further monetization of the platform because look the reality is take all the customers that are here and so many other user conferences they're trying to figure out they have an edict from the board you have to embrace AI okay so like they spent whether it's like getting in line for GPUs data centers whether it's on Palantir, whether it's the hyperscalers, when it comes to strategically with customers, marketing budgets, analytics, who do you go you can't go to a hyperscaler for that to some extent. I think it just speaks to why like if you could say like a lot of their partnerships with some of the biggest tech brands in the world, that's not coincidental. I think it just shows they recognize the opportunity, but it all speaks to customers needing to spend on AI use cases. The use cases are going to be the key to everything we see playing out.
When it comes to the Palantir partnership, Palantir is like broad-based intelligence via the ontology. Zeta is like very hyperfocused in marketing. Where do you see the synergies there over the coming years on that partnership?
I view it as like the engine is really Palantir, right? But Palantir that's not who they're going to be. They need to partner whether it's Zeta on the marketing side, whether it might be other companies in the financials, others on government, you know, depending on the different use cases and projects. Look, I think it's really Palantir recognizing like sovereign AI to me is the key because customers have to have control of their own data. And if you look let's say a Zeta customer. They're not just going to put that out to like a frontier model.
Yeah. That needs to be within their ecosystem.
