Alex Karp, CEO of Palantir: Exclusive Interview Inside PLTR Office

0:03We were the freak show and we spent 20 years for this moment. We're doing it. We're doing it. And I'm sure you're enjoying this as much as I am. If you were a cupcake, what kind of cupcake would you be? I don't want to be a cupcake because I don't want to get eaten.

0:27Alex Karp, welcome to Sorcery. I'm happy to be here. Well, we're fresh off of earnings. Palantir has hit$500 billion. dollars recently just released a new biography how are you feeling um i feel really good um you know look we started the company with a lot of ideas that were really exceedingly controversial until about two years ago fdes everyone thought that would destroy your company uh being fully marriageocratic everyone thought you're not supposed to do that um uh low hierarchy almost no one does that so like like eliano and i were only separated by one layer which is fictional because like we talk and it's a very very flat hierarchy um we were uh we thought we should give america an unfair advantage uh in government first and then in commercial um we built these products more like artistic things years before anyone thought their relevance pg the anti-terror product Gaia, the product that most special operations use in the world Foundry, Ontology, Apollo Maven, and we're still a freak show and you know if you walk around here, like the crazy thing about Palantir is you know I get invited to, like I meet lots of companies and we you know big companies, small companies, private companies, commercial companies the most famous people in the world, some people should be famous, but luckily for them aren't.

2:00And I would say Palantir feels like if you walk around here, it's like kind of a startup vibe, but with scale. And the thing that's special about Palantir, I mean, my version externally is we gave venture returns, not just venture returns. We gave venture returns as if you're like, I don't know, you're like Peter Thiel, Sequoia, Kostola returns to the average person who is willing to do their own work and stand up against kind of tried but not true ideas like playbooks. So we're like the anti-playbook company. And then, you know, I mean, you know, I'm currently in a battle with, you know, short sellers primarily because they could go short some carcinogenic company, but they have to short arguably the best company in this country and in the world by any metric.

2:53And by the way, judge us by our enemies. Look who hates us. I mean, go online. I mean, I guess people here have gone on X. Just forget any, you don't need to know anything else. Just look at who hates PowerShare and look who hates me. And then judge us by that standard. What should our market cap be based on that standard? So I don't know. I'm very proud of where we are. I believe I know it's the way beginning. You know, internally, we're kind of a very young company. I mean, I don't mean just in terms of age, which is also true, but it's just a young, fresh vibe. We've anti-aged. You've reached anti-aging.

3:32We've reached anti-aging. Well, I do think age of company is directly correlated with the rate of age or anti-aging is directly correlated with the layers of hierarchy. Our company is 20 years old and feels like it has scale of a 20-year company, but the vibe of a four or five-year-old company, meaning we know what we're doing. We have a way of doing things. It's very tribal. We stick to our tribal knowledge. But it's, you know, like, for example, you know, we put the whole companies, we bet on the U.S. military and on the U.S. commercial sector, and we pivoted the whole company to both, basically.

4:11I mean, we still have a massive presence outside of America. But we've been and like we can do we can make these decisions like in like somebody we last this marriage meritocracy thing, which is basically to give people who are tired of being discriminated against an application process a chance to come and learn something useful. And the people are, how long did it take to launch that? And I was like, yeah, I don't know. Three minutes. Three minutes. It's like decision. I don't know. Like a lot of like I was we were talking about this before, but like it's hard to be fair to the total bereft of common sense.

4:48And in practice, not particularly honest analyst expert class, not because they're wrong the first time, but primarily because they can't admit they were wrong the first time when they're wrong the 10th time. But if you want to be slightly fair to them, this company runs on like a much more artistic. It's more much more artistic than science. So where does that come from? You know, obviously primarily from my mom was a professional and world-class artist. And again, everyone says they're an artist. But then there's a very big difference between a glacial difference between like my mom is a above one rule of 100 artists.

5:29Like, you know, it's like in a very different sphere. And then on my father's side, they were heavily involved in commercial art and like textiles for like a thousand years. So, like, and what people always think of, like, the lay person thinks of art is you just doodle something. But I know it's crazy, but you're from, like, an artistic family. Yeah. That's what people think. But actually, art is you tap into something very, very deep that is not understood about the period of time you're in and does not become understood until, like, 20, 30 years later. and that are captures something in the zeitgeist that is so special but then the depth also transmutes to like something more universal do you think that's how palantir is being viewed right now well no i mean i think people like i think i think one of the one of the crazy things about our society is people who are more on the front line like soldiers workers uh vocational workers, what we call retail investors, they're actually looking at the frontline data in an unfiltered way.

6:44And then almost everybody else has outsourced value assessment and quantitative metrics to experts. But the experts in general, or even generalization, I can't think of any expert class that's been right about anything substantive in the last 20 years. And then, so at this point, when you're like, when the experts call the experts, the analysts, in this case, or journalists, or I don't know, you're a financial analyst for a paper, a hedge fund, like you are actually a medium and it's your job to transfer the reality on the ground into a reality you can understand. Yeah, but the reality you can understand is not reality.

7:27and like but then because there's like it's like a super unique uh bubble they can't quite allow themselves to say yeah but and so but one of the greatest trends is like i mean at the end of the day what makes one of the things that makes a great artist great is they have a vision of what they see in the world and they stick to that vision although everybody in the world said but you can't paint like that you can't write like that you can't you can't picture photography that way because it doesn't i don't know and then by the way most great artists like my mother end up with no money yeah and uh i mean that's the book has like a lot of tds in it but i mean it is true we were not economically privileged but you could look at it as like but why were we not economically privileged because like my parents had these super high level of intellect.

8:24Yeah, but it's also because they kind of stuck to the guns of how they saw the world. And that's where the experts are like, you know, like this isn't safe because in almost all cases, this doesn't work. Yeah, they're right. But in the one case where you change the world, it's the only way it can work. Is this why you're so committed to the American worker? And even in the recent earnings call, You called out you're giving venture returns to retail investors. You've created a really amazing cult behind Wall Street bets and a lot of retail. So how do you feel about retail? Well, I think, you know, I always think there's the economic and there's the psychological and really powerful things are aligned.

9:04So, like, you know, I in no way like I hate these victimhood BS things. And honestly, when you're almost everyone who believes in that is a mark, whether they realize it or not. But I mean, like they may not realize it, but you are the mark. And like and that's frustrating because a lot of these people who believe in that really deserve better. But it's hard to give better if you believe in an ideology that can't work. But I did come from an environment where it was not expected that I would be co-founder and have a but-for role in building arguably one of the greatest companies ever built. And I don't mean that even like in like the half trillion dollar market cap or whatever it is.

9:49I just mean in terms of how it's changed the lives primarily of Americans on the battlefield as investors and also on the factory floor. But the thing is, if you come from nothing and you're this amorphous, racially dyslexic person from a very specific kind of culture, not even Jewish culture, it's like super acrivic, Germanic, left-wing culture, you assume the world may not work out for you and is definitely not looking out for you. Okay, so what other group of people in this culture have exactly the same vibe? Yeah. Soldiers, people on the factory floor. Who does the dying and bleeding for us?

10:34Soldiers, people on the factory floor. Who gets killed because somehow constitutional legal scholars only read the Constitution so it's expansive to protect their rights? So their right to be happy, their right to go to Yale, their right to be wealthy, their right to be safe. But somehow the Constitution cannot be read to stop the reality of like in the last two years, more people have died of fentanyl than every single person who's died as a soldier since World War II. But they can't. And part of it is like they have a lot of intellectual reasons. But the real reason is they don't see themselves as having had the same fate.

11:11But if you're me, you look at those people. And then, quite frankly, look at the U.S. Army. Look who fought and died for our rights today. By the way, it was mostly working class people from what the elite calls flyover states. It still is. and then look at the U.S. military. It integrated, first to integrate, first to bring meritocracy. It still fights for meritocracy. It's the first major institution in the world to say, I don't care where you're from. And they did it way before American society. So that's that version. Then there's the economic stability version. My version of what, and by the way, a fair thing to ask people is, what were you saying 10 years ago?

11:57So one of the most amazing things about Palantir, like is, and you know this, but like you go online and people who like, you know, whatever, some people don't like my vast words of wisdom. And they're like, he's saying this now. What did he say 10 years ago? It's like, we're saying this, we've been saying this for 20 years. Close the border, get rid of the identity politics, victimhood bullshit. It's especially bad for the, for people who need it. Have a strong military, make that military the strongest of the world. Give an unfair advantage to America. Do not treat all cultures at equal. Simultaneously, do not get on the whole neocon, make the whole world like America thing because it doesn't work.

12:33Be skeptical of immigration. Technology will be the determinant variable in who runs the world. All this stuff you're learning at Berkeley about people are just going to inherently absorb American values is really just downtrend from our military superiority. You don't know that, but our adversaries absolutely know that. We've been saying this for 20 years. And the only difference now is people who are skeptical of us are forced to realize we could be right, which is why they run to short sellers and analysts who still can't rock where we're at. There was a part in the book where you had just won the Dwight Eisenhower Award.

13:09And this was a little bit of a surprise to your employees, but you got a little choked up because of the impact of what that is to troops. And so could you just explain what that experience was like for you? Well, first of all, Eisenhower has this German name. He's from a German religious minority family. He was a pivotal figure at gunpoint in desegregation. He helped win the war, or pivotal. But the main thing is, you know, I lived in Germany for a lot of my adult life, which was a phenomenal experience, which maybe they went into in too much graphic detail. What are you talking about? I was like, yeah, we got to know.

13:52It's like, it was, I went for the right reasons and I may have stayed for the wrong reasons, but it's okay. And so I have a lot of deep understanding and, and I'll get to this, and deep appreciation for the German culture. I think one of the craziest things is, you know, this whole thing online where people like, like laud the Nazis. Like I spent a lot of time talking to Nazis, like real Nazis. and like understanding what made them tick and what made them i mean part of the crazy thing about people a lot the nazis nowadays is there's not a single not nazi that would ever have included them in their movement and would have shipped them off to the camps and quicker maybe than they shipped me off to the camps uh but um and uh and it's like it's uh but thing that is crazy unique about America, whether it's, you know, somebody from Montana, Iowa, going over to fight because they believed in America and they believed in the greater good.

14:58And there really was, this was a primarily moral, it's like, honestly, it's like Lincoln. This guy fought to end slavery, it was not economic. It was moral. Like, what other culture actually engaged in civil war just because it was wrong what was happening in the South? That was the primary. I'm not... Like, the modern way of reading is, like, economics. It's like... Maybe. But the primary reason why Americans fought and died was moral. Primary reason why Americans fought and died in World War II was moral. And they had no tethering. Like when you're a soldier from the North dying to fight slavery, it's not that you have, I don't know, black relatives and friends.

15:49It's because you think this is wrong. When you were over fighting the Nazis or Imperial Japan, you were doing it because you thought America was a superior way of living and this wasn't wrong. Now you can, and like, and then whatever one thinks about these things, no other culture does this. It's the same thing of how did we get meritocracy until recently in America? Meritocracy is one of the things that we don't often value enough, even now in Europe. In Europe, I was involved in hiring at this institute I worked at. And one of the biggest problems was I was always like, of course, we need to hire the best person.

16:30That's not the way it works in Germany or Norway. The best person doesn't get hired ever. And so at our elite institutions, we embraced meritocracy, we embraced the higher good, and we fought and died for that. And then the fact that Palantir can bring that kind of person home more safely and arguably, whether people believe this or not, the primary purpose of Palantir is to be so dominant that those people don't have to fight and die. Because everyone knows you're going to die 10 times more if you attack America. You want to sleep at night. You want to make sure our soldiers don't have to fight and die.

17:08Make sure the adversary knows they are going to get totally effed up if they screw with us. And that's like a really noble purpose. And it's not any less noble than when we started the company. In fact, it's more noble. Sorcery is brought to you by Brex, the financial stack trusted by more than 30 ,000 companies, including one in three venture-backed startups in the U.S. Nearly 40 % of startups fail because they run out of cash. Rex is literally built to help founders avoid that. Unlike traditional banks that let your money sit idle, chipping away at it with fees, Rex is designed to help you spend smarter and move faster.

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19:10Trusted by more than 65 ,000 companies in over 160 countries, Carta's platform of software and services lays the groundwork so you can build, invest, and scale with confidence. Carta's fund administration platform supports over 9 ,000 funds and SPVs, representing nearly$185 billion in assets under management with tools designed to enhance the strategic impact of fund CFOs. For more information, visit carta.com slash sorcery. That's C-A-R-T-A dot com slash S-O-U-R-C-E-R-Y. One thing that was apparent through the narrative of the book was you're self-made, but you're not self-made in an economic sense.

19:51You're self-made in maybe a morals and values sense. So how did you become Alex Cart? Well, I mean, you know, there's all these variables, very smart parents, highly educated, crappy school, which I never would have done. Like, you know, it's like and so you learn like the world is violent.

20:14Dyslexia, meaning there's no playbook I could possibly follow. I think some of the reasons why dyslexics are so outperformant now is that we're in a non-playbook world and the playbook's not that valuable. But if you're dyslexic, you can't follow the playbook or only in the third rate way. So you invent new and generative things.

20:39Look, I've never been accused of false ill modesty. I think in the end, to do something important, whether it's me or like Eliana or look at all these people here, like these are among the best and most talented people in the world. At a certain level of accomplishment, you're in an artistic space where it's very hard to explain why you have your insights. And it goes way beyond experiences that, of course, also influence them. but like i just have artistic impulses and they shape my life and i've allowed myself or i've been forced to allow myself the freedom to live that way and in there's one country in the world where you know you get rewarded for that because in america if you deliver you can be you you know like you're your own boss right you decide you want to talk to you decide you don't want to talk to, you have ideas of things you'd like to advance on.

21:35And I think one of the biggest variables in my life is just simply, I live in a culture where if you deliver, in this case, economically, and by the way, at 18, for most investors, we were failing for at least 15 years. Many would say 18 years. Honestly, some would say until two years ago, right? And still, Oh, this is a culture where the FDA, ontology, superiority over the West, extreme meritocracy, the fact that I would just tell people basically, yeah, the financials are going to show up. You know, that's only possible in this culture. And I guess maybe because I lived abroad so long, it's easier for me to accept and rely on that.

22:17I think sometimes people who've lived here their whole life don't always exactly understand. This is a maximal freedom culture. It's the only culture like this in the world, and it'll allow you to self-express. And if you self-express, that self-expression, because it's not Playbook, creates an environment that is exceedingly hard to compete with and will piss off all the right people. How is a value creation for Palantir different than traditional SaaS companies? Well, first of all, it's important to remember we are valued. Like we drive our whole business based on a set of beliefs that are like America, superiority and so on.

22:56But then interestingly, that's tethered to the value creation argument you're asking, which is at the end of the day, if you believe your client is noble. Like I believe our U.S. government clients are not only noble, but they're more noble than I am. and I'm happy with myself, but they're doing missions that will change world history for the better. Okay. So if you know that, the thing that's going to happen downstream from that is you're going to resist building parasitic products, right? Because like, I don't want a product that will make me, despite what anyone, but like anyone who's been a Palantir will know this to be true.

23:37So we did not the audacity of just saying we're going to build a product in PGA that's going to make you safer. Let's go away from the ambient noise that will make you safer and more protected is audacious in a weird way that we didn't realize. The most audacious part of that was saying we're going to build a product that's actually what the client needs. because what you're supposed to be doing software is build the client that the client gets addicted to not the one they need and like this is like and this is absolutely a truism in in in software development of any kind and so the like the again the most radical thing we ever did was say yeah client or in this case partner that we look up to has these needs we didn't even give them what they asked for, we gave them what they ought to ask for, which again is very artistic.

24:36It's like any rational business would have said, I don't know, client A, B, C, D wants to be, at the very least, you just give them what they want. That's kind of what integrators do. And then what very successful software companies do is say, oh, they think they want X. We'll fake give them X, but we'll give them this thing that they can't get rid of. And then nothing else will work, but they'll just have to pay. And then I can hire 50 ,000 salespeople and get these wonderful economics. And then every single decision, like again, the FDE thing, now everyone copies it, but it was the most radical.

25:06You had everyone making fun of this for 20 years because that meant you were going to get a one multiple, but there was no way to extend PG. Essentially, you can think of PG as a precursor to AIP because you have free text that a computer could not understand. The NLP technology was primitive. The only way to extend that product to the bounds of technology now was to have people doing the impulse. And then the only way to build the next product or deepen that product was to understand what the customer ought to want tomorrow and build that into the product today. And so like that value creation, by the way, it ends up being very, very protective because, and, and then it, because the customer partner actually becomes, they may not like you, like some of our best clients globally, both in government and in commercial, we're like, I don't really like these guys.

26:00Yeah. But you know what? When you bring someone home safely, they learn to love you. And so, and then that allows us to have this privileged position that we now have. And now when we're launching, you know, when we, again, there's example, the most recent example that people will be more familiar with would be launching AIP. Okay. When we launched AIP or I launched it in like an artistic, I don't know if you know this story but in any case i launched aip in like the darkness of night the darkness of night yeah okay yeah on like uh pre-easter holiday because it would have been massively resisted and and i would say it's one of my favorite people said in any other company every the whole head of whatever part of the product that was going to be involved in this would have quit because it was just launched it completely artistic like this is where the world is going we have all the components.

26:53We had ontology of foundry, but the components need to be brought together. Okay. The thing is, if you're working back from what will sell, you would have said, well, wait a minute. Everyone's saying LLMs are going to solve all these problems. But I believed, and it turns out that LLMs are commodity products and orchestration would be much more valuable than the product themselves. You need both. We need the LLMs, but in reality, and that's part of the reason we have these numbers because it turns out we're right. But if you were working back from what experts think and what customers are asking for, you do not launch that.

27:29You launch something else.

27:35Okay. You can ask as many questions as you can. I have one more question. So it's Eliano. Okay. Eliano, she's the boss. How many questions would you like? 72 okay okay um why not yeah so on AIP it seemed like that was a big pivotal moment for the company and getting into this next realm of AI which is something in transformation that you've embraced full wholeheartedly versus maybe some other people um to the extent that you go into different corporations and then you make the products for them on top of our current products or we build new ones. Yeah, that's true. Would you say that that was a major component to why sales cycles have compressed and why it's been easier to sell?

28:23You know, it's a really good question. It is that, but also the zeitgeist has changed. Like, although there have been a lot of projects in AI that haven't worked, most leaders in the corporate world and government know of projects that have worked. Great portion of those are in Palantir. So in the government, there's a deep understanding of the government side of like Maven and other things, Hivemind. And then on the commercial context, we have all these very public customers and people begin to see their unit economics changing. And particularly important, they're able to change them while being in the public sphere.