AI company, led by Black billionaire Alex Karp, wins $250 million U.S. Army deal

Palantir Technologies, a leading artificial intelligence (AI) and big data analytics firm co-founded and led by African-American tech billionaire Alex Karp, has clinched a $250 million contract with the United States Defense Department to advance research and development in the fields of artificial intelligence (AI) and machine learning (ML).

The announcement sent shockwaves through the financial markets, propelling Palantir’s shares to a remarkable 6.41 percent surge on the New York Exchange, closing Wednesday’s trading session at $14.85 per share.

Following this news, analysts have disclosed that this contract cements Palantir’s status as a pivotal government service provider, auguring well for the company’s Q4 performance and revenue outlook for 2024.

This newly inked three-year agreement serves as a testament to Palantir‘s deepening ties with the U.S. government and underscores its burgeoning role at the intersection of AI and defense. The AI services agreement will further build upon Palantir’s ongoing collaborations with the Army Research Lab, dating back to at least 2018.

Under the leadership of 55-year-old Alex Karp, Palantir has witnessed an impressive surge in performance, facilitating both the U.S. commercial and government sectors in harnessing the power of large language models tailored to their proprietary datasets. This strategic move has paved the way for substantial revenue and earnings growth.

However, on the other side of the Atlantic, Palantir is grappling with a wave of skepticism in the United Kingdom, which casts a shadow over its global expansion plans. This skepticism is chiefly linked to Palantir’s involvement in the bidding process for the UK’s National Health Data, a contract valued at £480 million ($595 million).

In recent times Stakeholders, encompassing medical professionals, privacy advocates, academics, and members of the ruling Conservative Party, have expressed reservations concerning Palantir’s potential selection for this significant contract.

The source of this apprehension primarily revolves around the company’s associations, including co-founder Thiel, its extensive military engagements, and its role in U.S. border control operations. Allegations have surfaced suggesting that Palantir’s technology might have been employed in the detainment of migrants within the United States and the orchestration of drone strikes in Afghanistan.

In light of this contentious history, a lingering question persists regarding Palantir’s suitability as the custodian of the NHS’s sensitive healthcare data. Critics remain skeptical about entrusting such a critical responsibility to a company with a checkered legacy, underscoring the need for thorough scrutiny and consideration as the bidding process unfolds.