Palantir CEO Alex Karp on Tokenmaxxing & Taste

0:00Yeah, get in here. Clos. This is good. Okay. How is it going? How is AOP con this time around? What's changed? Well, we were in a phase. And each one of these things like marks a time. First of all, you guys are even more baller, more successful. Thank you. Some attendees in your pocket. I think it might have been part two. You got to say thank you. You know, it's like you blew us up. You're looking bigger and stronger. Hey, are you more attractive in your personal life now randomly? Well, here's what we're actually focused on, dead hangs. Yeah. So you came on last time, you said your dead hangs around like 5.

0:33Oh, no. Well, it's plateaued in the last couple of months at 5.30. 5.30. Okay. So the thing is, like, people are going to hear that. They're going to think, hanging on a bar. Five minutes. How hard could it be? You got to go and do it. The audience has to go try to do it. We've started doing it. We're still in the. Under two minutes, I think? Yeah, between. One and two minutes. Somewhere around a minute 30, you feel like your tendons are going to rip. One 30 dead hang is respectable. Two minutes is super elite. It doesn't feel respectable when you have the five-minute number. You're looking at the timing.

1:05Strength matters. Now, the thing is, I don't want to go into rabbit hole in training, the single biggest mistake people make is they try to hang every day. You need recovery. It's like anything else. So if you want to mimic and get progress, you just do what I do, which is once a week you hang as long as you can. It doesn't have to be super macho. And then that's your day. So like to say you can do 130. But multiple sets? No, no. One day a week you do your maximum. Max? Wow. So like let's say you could do two minutes. Okay. You try to do at least 130. You fight to get to 130, but you don't fight to get to two minutes.

1:37Got it. That's your dead hang day. And then you can basically fuck around the next day. We'll do whatever you want. Don't overdo it, but you can do two times one minute with a long break. And then can't you just screw around, do less and less and less. Two days before, if you're a two-minute dead hang, you do like four times 15 seconds the day before you take off. and you do that just keep doing that and your day what the mistake people make is they hear my ball at the time fuck that guy i mean the mistake you're making is not doing a course this is a whole new revenue line you guys have more for you guys yeah like hey call in the car so um yeah i mean the dead hang is it it's like and also some of it's just genetic like my other metrics are elite, but that this is somehow alien territory.

2:25God-given gift. What about breath hold underwater? I don't do that. I'm not sure I have it. I grew up swimming. I think I'm weaker at that. I bet you I'd be in your guy's range. I'm a dive master. I can hold my breath for three minutes. I think you'd be crushing me on that, honestly. But you have the lung capacity of a whale. That's true. If I'm not moving, I'm not using any oxygen. It's like you're like a whale floating out there under the ocean, waiting to surface. It's true. So, you know, I'll tell you the difference. God, they're always minding me out there. But, like, okay, when we first met, it was like AI may be real.

3:07Then I would say somehow until about two weeks ago, there was like a holy fuck, this is real. But somehow it's not working, but we're not allowed to say it publicly because we'll look stupid. And then there's a lot of investor hype. There still is like investors printing 10Ds. So you have the investors on one side. I think people realize it's real, but, you know, it's like, you know, you have the whole token maxing. And people are on to that. And then so there's a whole value lecture there. You have a political situation where, you know, people who do not understand basic economics are winning the political argument.

3:46So we can talk about where AI is coming from. Yeah, there's a lot here. Let's break it up. Let's start with the token maxing thing. Let's start with what's real. How are you actually thinking about deploying AI, ROI? First of all, what is Palantir's philosophy around token consumption? Well, okay, we have a product that will allow you to be able. I mean, internally, it's called something, but externally, but really we call it the demasturbatory, like get off masturbation thing internally. It's like people are just like sitting there all day, kind of like a porn addiction. And enterprises are like, okay, we knew this.

4:25We believe this will create value. But we cannot have people just like some people. Checking the weather with it. And just rearranging deck chairs on their personal Titanic. It is literally like porn. Like people are like full on. It feels so. Yeah, tool shaped objects. Tool shaped objects you're looking at more than you want. You hope no one notices. It feels productive to have every email classified with tags. Here's what it comes down to. Business problems can never be, I mean, sometimes they can be solved purely with money and just spending more. But very often. Actually, I think it's the opposite.

4:59So just to give you a weird analogy. No, and I was going to say very often it's more the opposite where it's about figuring out the right way to do something. And then you can use capital to fuel that process. Well, let me give you a thing that's too generous for you guys. Okay. it it it's taste plus money okay yeah and there is no that either like ai like if you look at like to pick any issue you want to talk about token mechanism maxing uh what's going on with deploy codes are other people going to build ontologies why are why why does our political class not understand ai especially in europe it's like yes because all these things can be scaled in a very valuable but largely going to commodify way but you can't scale the taste of like what is the business problem you want to have to solve and need to solve at the end of the day whether it's in the for whether it's the ukrainians fighting the israelis commercial entities it's there's somebody sitting there who's like okay but this problem is valuable this problem isn't and once that value that problem is always has that problem always almost always but not always has attributes So there are some problems you could solve with this.

6:07Like, I want to write a report on GDP growth in China, right? Okay, but if it's a problem that requires a knowledge store, like, I want to understand the specialized way I underwrite. We're going to have a guest here. I want to understand the specialized way I drill for oil and gas that's both legal, ethical, and reduces the cost of production. I want to change the supply chain of my industry, whether that's military or whether that's building boxes or whether that's cars. these things require actual precise ongoing processes they are enhanced by large language models they are not replaced by large language models and then you get to security issues like but for us like the whole mythos things is just a boon because like yeah we could take any model their model open ai model open model we can identify we can now identify uh vulnerabilities at like 10, 100 X.

6:59Yeah, but then who patches them? How do you patch them on-prem? How do you patch them on-prem so that your specialized knowledge stays on-prem? Like if you're any business or Intel service, a lot of these things are very similar. Like you're not putting your classified data in a public cloud. Same thing if you're like, you have a special way of farming soybeans, but you're not. So it's like, how do you have, how do you, so all of these problems are exposed, identified. And then you always have a thing of where's the charisma, which people really underestimate. And it's not global. There's no global charisma now.

7:34So right now, the large language models are very frontier. Companies are super charismatic with investors. I'll give you some news. They're super not charismatic with enterprises and the people. Even with enterprise? No, no. Because I understand with the people. No, no. The enterprise people. I have a secret. Every company has a secret way of selling. You know what my secret way of selling is? Don't even call. Don't come talk to us. There's a frontier company. Go spend two days with them. And if you're lucky, after you're done, I'll let you in my door. They're like clamoring. They're like, hey, I'll take your bad brand.

8:10We have a great brand in enterprise. But it's like secret knowledge because the investors love this. They're like, hey, my stocks are all up. Everything's up. I mean, Palantir's done very well. But it's like, and you guys are doing very well, I imagine. And it's okay. We're, you know, we can, but I'll tell you what, you go down the street, you talk to a Marine, you talk to a bus driver, you talk to the person who owns the bus driving company. They are not happy. They do not like these people. They're tired of people token maxing. It looks like masturbation that's cost them money. They're like, and honestly, then you have something we're not allowed to talk about in this country, likability.

8:48Like Palantir, we have, I think we have like 50, 100 million global bands. we have like 5 million people that wake up in the morning literally calling me satan i didn't know i had that kind of warm hand but uh you know it's like that's what they believe yeah and like and they really believe it okay what people are not allowed to really address is like we have fans and enemies yeah yeah these people polarizing yeah we're polarizing which means both sides yep these people have one side yep they're just it is so it's like you and it's like it's a really social media companies too have the same problem yeah everyone uses them but no one likes them yeah but then they also live in a circle and that circle is printing money yep so it's like you know when you look in the mirror and you just printed a lot of money you look pretty fresh is part of it is part of it that some element of the technology let's just say llms is so magical that the companies involved that the companies that are making and selling frontier intelligence can be bad at a bunch of other things and still grow.

9:49Well, no, no, no. They are magical at a certain kind of thing, allowing you to write, for example, code. Now, that code can't be used as a knowledge store. So if you look at code in like three different ways, like just using pound, zero as a model, we have code that's basically infrastructure. So what are the Ukrainians using? What is the Department of War using? What do a lot of our enterprises, we call that primitives. It's basically hard-coded things that understand the world. What do you do? It would take millions of technical hours and an understanding of all these enterprises to do it. So it's much more like how do you build a steel beam?

10:21Then you have like code that is written by FDs. Okay, so that's kind of managed. The reason why FDs work, the secret is, it's actually managed in something that we as a product. So you're writing to a code base, we're managing that, we're increasing our product. It's not just random people writing. Then you have, let's call it free code. That free code is, that's magical. Like you can do it very quickly. It's almost right. It doesn't have to be exact. dashboards financial stuff little flow probabilistic stuff where you just have to one off analysis magical yep by the way it's magical it not only creates and it's magical in a way i don't know people don't like the porn thing but it's also addicting it's like you know it's not good for you but you know it may lead to damage one more dashboard one more time it can't hurt that much i know my doctor says it i shouldn't do it but it's like it's like that right and you just keep And if you're involved in that thing, you're also making money.

11:16And then, last not least, in certain circles, like if you want to be a researcher or you believe, essentially, it's a religion. And one of the things that's very charismatic, especially to people who've never had a religion, because all of a sudden that hole in your heart that was yearning for, I don't know, I would say, an established religion, Judaism, Christianity, Islam, is being filled. and all the answers are there. But it's very, very successful at doing things that a company has to do. But it is not actually solving the problem that enterprises are. Now, it can solve them. That's the trick.

11:55It's not binary. It's not like you can't say they're not valuing. They're totally putting our business on steroids. Like, without LLMs, nobody would be talking about our ontology, about Apollo managing exploits, about our ability to manage an enterprise essentially turning all these companies into FDEs these deploy codes, we love them because now every company wants a deploy code, you know how you do that you replatform on Palantir and it actually works it's not somebody with no taste who's never done enterprise who has no earthly clue how these things work who's done something else and is just imagining they know how to do it yeah, it's part of this moment quite entertaining for you because you guys have been working on understanding businesses at a deep fundamental level creating you guys have effectively been doing the work that it that people are promising ai could do for 20 years now but actually doing it finding all the really rough finding all the really rough edges and uh and not and being at a point where you don't have to oversell the technology you can sell both things but now there's maybe here we go we got it together um now there's maybe oh it's the wrong side that's why flip it around there you go there you go there you go hopefully we got that i don't know all this stuff i trailed off but uh but is part of it entertaining to you that it feels like you know palantir has always been in some ways not had competitors because there's nobody with Alex Karp running a company that does what Palantir does besides Palantir.

13:37But at the same time, there's been tens of billions of dollars deployed now to effectively do what Palantir does, but just selling the intelligence part, not selling all the underlying kind of infrastructure. Well, they're doing two things. They're trying to sell the intelligence part, and they're trying to pretend if you just hire a bunch of people and let them run around their FDs. Now, the very cool thing is when you've been in your basement doing your thing and everyone kind of used it as the freak show, it's really interesting and great to have adoption. The pretty ironic thing is half the people adopting now don't even know they're copying.

14:19But now, the copying thing helps and hurts. Where it hurts is in the beginning, it puts clutter in the market. Yeah. and there's no doubt about it, where it helps. And then we saw this with defense tech, honestly. So like in defense tech, we were the only people. We were the first people despite what I love these, honestly, other podcasters, they're interviewing people who are parroting things I said 20 years ago. They don't know it. And it's like, oh, that's so insightful. It's like, yeah, of course it's insightful. Karp said it 25 years ago. And like, but so that kind of, that part is super weird.

14:53But what really happens when we see is it expands the market. So in defense tech, we would not be doing this well, just purely in government, unless there weren't 50 companies that were doing similar things, because then the people are like, okay, first of all - You view it as like off-balance sheet sales resources, where other people are basically doing your sales. Well, no, that's the large, they do two things. they increase the size of the market because de facto, nobody wants to find an underrated market where there's only one person. Sure. So like if you're the one person, the percentage of the defense budget you can get is much smaller.

15:32And two, they set up a comparator. It's like, you know, you may not like the freak show. Okay. But have you noticed the people who are serious buy it? And then three, it changes the standard. Now, what you're seeing now is like that times 100x. Yeah. And it does change recruiting, retention, and how you build a company. And we're always thinking, you have to think about how to, being dyslexic, huge advantage there. Because you don't have a playbook, and now you need things to shift, and we're doing that. The central thing, though, that is just cannot be developed, even if you understood the playbook, a lot of these things are like, appear like, it's like, you know, LLM code appears like Pounder code, but isn't for a deployed thing.

16:16appears like pounder it isn't ontology you could theoretically copy parts of it but they're essentially structures that are built deep into organizations that we own and by the way take you three years and then three years we're in a completely different world but there is this magical thing called taste like in the end of the day the reason why you guys have done so well it's of course there's aptitude and diligence and showing up and all those things yeah but you have to be able to differentiate between two people who are in business, one of whom is saying something that sounds weird, that is insightful, one of whom is parroting something that sounds weird, and that's all they're doing.

16:53And a lot of people, very few people can do that. And you have the same thing, like the enterprises that succeed, there is a taste arbiter. And at Palantir, we have taste in every product, taste in every deployment, taste in every casting. Who puts the people there how do you put them there how do you organize the thing our ontology then does that technically how do you manage the whole org with taste who should be in charge what data sets should come in what what are the ways in which you protect what is what should you push into the public crowd what should be on-prem what what should i mean leaving aside the law and like wars war ethics what do you want to protect what should you protect what should you not protect because quite frankly you want that to be out there so you can get more data all those things are arbitrated by taste and then you have to have the credibility of having taste that's a real problem for a lot of these places because they don't have they they're popular with their friends they don't they really don't understand how unpopular they are in enterprise like they think it's like oh yeah it's like the way i think i have a problem with like professors at columbia it's like no it's a real problem like they think i'm satan and uh you know it's like i i i think you know we grew up in the same community let's talk about heidegger they're like they don't want talk about either so it's like it's like yeah and so that's just a it's a weird thing it's going to be a super the one thing i would say for anyone listening if you're listening to this and you're chillaxing and not active i'm not saying you have to agree with me politically or anything yeah they're the like partly because of this dynamic and very self-inflicted because i i tell you i can't name names i called many of the titans of this world and and like started of the six months ago like every couple days we're going to be calling every couple days like some of them i'm like yeah we're going to be i mean you know it's like honestly they're like the bad they find me very entertaining like i'm not sure like so they call because yeah it's like it's like oh yeah this is going to be entertaining you're going to pick up yeah so any case so i've been telling them for six months we're going to be nationalized yeah we're going to be nationalized and they're like why would anyone nationalize never happened in America.

19:01It's never why would anyone nationalize us? We're so likable. We're creating so much value. Like, okay, I'm not going to debate that. I know how likable I am. I'm not going to tell you how likable you are. But I am telling you and you know, the momentum on this is on the side of people and nationalize and we don't get our act together and figure out ways we can say, hey, look, there are problems here we're going to deal with. These things are not going to Yes, they are going to create opportunities. You have to talk openly about how these things are valuable because we have adversaries. You can't just say these all that stuff so the primary risk honestly to palantir and a lot of these other countries is and then it's going to be nationalized before national it's going to be regulated by people who don't understand this and now they'll tell you in private i'm working on this and this is in this lobbyist it's like not going to work so like that's something like if you're listening to this and you're like look you know you don't have to agree with me on all my proclamations i got a lot of by the way there's some people who think i'm saying we should have a draft too lazy to read i'm just saying we should like in a world where everything is changing everything is changing don't we have to find some communal structure to remember we're american you know like my you don't like my idea of like we all do a week in the park great come up with some other idea we can have no idea you know and like and then they're like well i'm saying i do not want to draft just to be explicit they're like oh that's pro-war no honestly you know what most of our wars are fought because no working class person is making a decision you start making sure everyone is involved in everything i'll see you have few wars we fight it's actually the anti-war position but any case disagree with everything if you're we have on the right and on the left people uh people who have no earthly clue what they're talking about right and left all they're talking about is how much they hate us and those of us who are sensible in the middle you know too many of us are chill waxing like oh like nationalization it can't happen america would never do that Sleepwalking.

20:51Sleepwalking into, and you guys have tendies to protect now. You guys should be on the front line of this. Like you got full, oh, sorry, I have a full on very impressive corporate leader coming on. So I got to turn it down. Last question. Last question if we have time. How are your conversations going with Fortune 500 CEOs around headcount planning? There's been so many layoffs this last year that people were saying, hey, we're getting so much out of AI. We're able to cut back here or there. People inside tech often know maybe there's just a reduction because there needed to be a reduction or got bloated.

21:32Maybe they do need to fund some AI initiative. Or is it declining business model? Like they're getting out-competed by someone. Yeah, the business just doesn't have momentum. But how are those conversations going? What does it look like? By the way, I talk to Fortune 500 companies. I talk to unions. I talk to soldiers. I talk to fire. if you upscale somebody they're more valuable sure and like all these whether it's people working on batteries people were driving trucks people corporate leaders and again this is where i think we have to be very careful to be more disciplined on the corporate side like if you run around saying ai allowed you to fire two-thirds of your workforce and you did it because maybe your competitor's kicking your ass yeah that could that is a really like you might as well just go sign up for Bernie Sanders Manifest.

22:15And part of the thing is, they really believe that can't happen. So they're free riding on the fact that it could. And it just cannot work anymore. These things are very, very explosive. The American people sense that there is something dangerous here. And when people are playing with that fire, they assume the fire won't burn their hands. That's not the world we're in. That fire is going to consume us. And what we see, again, the war fighting example is just the most neutral, not for everybody, But, like, the soldiers at the bottom have gotten much more valuable. And I don't even just mean the special operators, which obviously they're in a different league.

22:50But, like, the people doing a lot of the operations now are doing our product. They're high school, vocationally trained. You see this everywhere. The modern enterprise is going to have, like, we have a very, very, very smart person coming on. And it's like you're going to have a very smart executive. he's much better at hiding it than I would be if I were him but that's you can talk to him about that but um uh um and uh and then very talented creative people with taste all up and down the stack any case I think this is time for me to use his time we uh thank you so much yeah great to catch