We grew our business 93% 93.

>> Better than what analysts were

expecting.

>> Okay, that's not Nobody Okay, great.

Forget Kim sensors. No business in to my

knowledge, no business is at our scale

even grown half as much. We grew 85%

last quarter or like that was crazy. 93%

is like a revolution. So by the way, and

then you would say, "Is the revolution

growing in a way that's profitable?" Our

adjusted free cash flow margins are 63%.

The US We are at massive scale. We grew

115%. 115%. The first thing that any

normal person does is spit out their

dentures. And after they spit out their

dentures, they turn the numbers to see

if these numbers are even possible. And

then legit Then the question is, "Can

this business grow at this rate? Can the

business grow at a greater greater than

100% for the next 18 months?" And what

you see in both the sovereign demand for

our product, the product offering, our

alliances, both that compute all the way

up including helping to open up the

world to being receptive to open weight

models and their fine-tuning. Beginning

to fine-tune these models so the models

work at Frontier is a business unlike

any other business that is poised to

grow with these margins and with this

revenue growth for another 18 months.

>> So the response has been very positive

since 4 weeks ago when you talked about

the AI sovereignty debate, customers

have been responding positively.

>> Yeah, okay. That You're using You're

using a frame of analysts are happy

customers. This is a revolution. This is

not Happy is when you come home and have

a nice conversation with your partner.

This is much more like you come home and

your house is a castle and you're flying

through the air in your car. Like this

is a revolution. This is not moderately

improvement, moderate happiness,

analysts are pleasantly surprised, al

eyebrows get raised. This is a

completely different world. And by the

way, again, I don't want to over

numerify this because like in in a weird

way it's not just the numbers but the

importance of the numbers. It's not just

93, it's not just 115, it's not We grew

US commercial at 149 almost 150%. 150%.

Okay, but what's important about those

numbers is you can see in the numbers

because of the the the charisma and

truth of the sovereign AI riff and it's

important that we helped launch together

that these things are going to go on for

a long time. And why is this important?

>> Yeah.

>> We have people trying to drug addict us

to a future they believe they control.

I've spent a lot of time with Dario and

the EA crew. They want to tell you we

have to march into a future where we own

nothing, where our businesses aren't

profitable, where none of us have jobs,

and where our adversaries win. And

Palantir and our allies are guiding you

into a future where you have growth and

jobs. The margins are a metaphor for

everyone earns.

>> You you've blamed the Frontier Labs of

overcharging customers, right? Open AI

has responded. They brought down their

token cost.

>> I by the way by the way I

>> So why are you deepening your your your

threat against the big AI labs?

>> there's no

>> In this investor letter you say we have

always declined and will continue to

decline entering into a parasitic

relationship with our partners.

>> Okay, but you're taking two things.

Charging for a price which I'm Palantir

we get paid a lot of money. Why do we

get paid a lot of money? Because we

create value for the customer first and

value where that they keep. So my

central obvious it's not even an attack.

All I did is put out facts. There's been

no response to these facts and primarily

I was talking about a philosophy that is

downstream from the belief that because

they will own the future, they can take

the your alpha and transfer to them in

the present. I actually truly believe if

these if if if a lab or Palantir or an

open weight model or people deploying an

open weight create a billion dollars in

value, they should make 300 million

dollars. You make That's a fair thing.

It's not about what you charge, it's

what you charge for. If you're charging

for something that creates very little

value and simultaneously, if I charged

you a million dollars for something and

you're like, "Okay, what is the value

I'm getting?" What if I charged you a

million dollars and you found out I

migrated your whole bank account into my

bank account at the same time?

>> And CEOs understand that. They

acknowledge those comments you made to

the four weeks ago when you came on

CNBC. But what do you say to the small

business that says we don't have the

budget to be able to have an open weight

plus a closed source model. We got to

just go with the frontier lab."

>> Well, I think actually the what's going

to happen more I think actually that's

the inverse. I think this the the

smaller business are going to move to

open weight models because they they

can't afford it and also they are very

worried about their IP. I think the

reality of what's going to happen with

our business partners, which are medium

to large businesses can

that whose fate most jobs in America

upon which rest, so that your economic

future and our ability to defend

ourselves rest on the back of our

partners. And our partners are going to

move for an application layer because of

open weight or closed weight, they're

not putting those models on top of their

enterprise. First of all, they don't

create a lot of value. Second of all,

the value they create gets migrated

somewhere else. And they're all running

around saying no ontology, no love,

which is like a set a saying from the

'70s I had to look up. But it's a it's

like that's what they're saying. And

they're they're going around saying,

"And by the way, we're not even we're

educating people that aren't even our

partner." Like not everybody we educate

is going to become our partner, but I'll

tell you what, they're not going to fall

for this trick of I give away the the

the means of my production and pay for

it. At least they should pay you. You

know, it'd be a very different thing if

they're like, "Hey look, we'll pay if I

came to you and like, "Look, I'll pay

you a million dollars. Yeah, your

business is going to be worthless after

I'm done, but at least I gave you some

money." What if you paid or

[clears throat] something?

You know, so any case, we're but by the

way, I've spent a lot of time with Look,

I've spent a lot of time with Dario.

He's he's not the caricature people

think. They have a philosophy. That

philosophy is a very important

philosophy, the determinative philosophy

in the tech scene of the last couple

years. And that philosophy in its

business practice basically says, in

simple terms, I own the future,

therefore you should migrate the value

of your business to me and be happy with

the derivative of that that you

sometimes get after a wealth tax.

>> If

>> And most Americans are saying, "I

already have a religion and I'd rather

stick with my religion than embrace

yours because my religion makes me

better, wealthier, more spiritual, and

many other things." This other religion

actually is a way of explaining to

themselves like you have to remember,

you're sitting at a a large model

company and you're highly ethical

person. How do you explain to yourself

why it's your right to migrate the value

of your business to their business and

therefore take the jobs and prosperity

of those people away from them. You do

it because you believe you're creating a

better tomorrow. Just unfortunately,

that tomorrow is not going to be as good

for the people that you are partnering

with and they're paying you.

>> So then if we see the industry move

towards open weight models, the Frontier

Labs, sure, sovereign. If the Frontier

Labs and come out with their what

happens to their valuation? Do they get

cut in

>> Look, I look, sorry, that's necessary

valuation for the topic, okay. I like

I'm totally that is irrelevant to me.

>> What happens to the Frontier Labs?

>> Okay, sorry, sorry. You know, I I talked

to Sarcan about this and I'm just going

to say the same thing. You guys are very

worried about what happens to their

valuation. I'm worried about what

happens to American enterprises that

power most of the economy, most of the

jobs, what happens to the Department of

War and the safety and veracity of our

physical and economic life.

Every but every company in the world

should be every company in America

should be downstream of that. I have no

professional or interest in in

discussing like, by the way, and then

also I would say in a slightly more

acerbic way, why are we so focused on

how well a small group of people do in

America? Why don't we focus on how

Americans are doing? And I'll tell you

what's good for Americans. They get to

control the value of the enterprise. By

the way, it's also very good for

Palantir. Witness 90% 93% growth, 115%

growth in America, 100 rule of 40 at 155

and and an ascendancy that looks like

this is going to go on for at least

another 18 months.

>> Speaking of Americans, both Open AI and

Anthropic have disclosed over the last 2

weeks hacking incidents. Should

Americans be worried about how safe

their data is?

>> Look, part of the problem that the model

companies have is they've told you this

is dangerous, this may screw you, you

probably won't have a job and maybe our

adversaries win because we can't work

with the Department of War. Okay, so

just go based on what they're saying.

But again, there is a way this works out

for all of us. So you can't The problem

of part of the problem the Valley has is

we've been super polyannish of like this

is all going to work out it's all going

to work out unless you're screwed.

You're probably screwed but then it'll

work out for us. The reality is that

there's the hybrid application layer.

That's the frontier closed model

narrative. The application layer model

layer thing is you're going to use the

model that works for you. You're going

to use it under any circumstance. You're

going to have compute that you control.

You're going to power that model and

those models are going to be at or

better than frontier labs. Now, of

course, that's disproportionately good

for Palantir like most things that are

good for the world.

>> Do you agree with US companies using the

more cost-effective Chinese open-source

models that are becoming more popular?

>> we we strongly encourage the use of

American open way models. We're not in

the business of telling our customers

what they do, but I would say the reason

why I signed that letter is if it's very

similar to like what happens in Europe

with the green party. If you say I'm

only going to coalesce with these two

parties,

>> Right.

>> you just are empowering a party that is

pro-migration independent of the

insanity of it. We need competition if

we're going to keep model companies

honest, which is the same thing as like

enterprise software. Like I compete.

Palantir competes in every jurisdiction,

right? We don't want to do what Europe

did. What did Europe do? Europe's

basically saying you can only buy

technology from Europe. How's that

worked out for Europe? We don't want

that in America. The way we win in

America is we compete and our open

models have are going to have to become

as good as Chinese open models. By the

way, it's also somewhat of an irrelevant

debate because in reality what I

believe, what our customers believe is

the models are only valuable where they

have FDEs and application layer and some

expertise in the installation of that

and protecting tribal knowledge. They're

not value as valuable as people may

sometimes think Palantir

>> The models?

>> Any models. Like this is the this is

like half the problem with the with the

with the with the with the lab narrative

is it's just not even true. Those models

are used effectively in enterprise where

they have an application layer.

>> Is it fair that they used distillation

to copy Anthropic's data?

>> Okay, there's there's a thing. There's a

lot of unfair Okay, yeah. Great. You We

can all be polyanish like we live in a

village in the 1500s. How do you think

the models got their value? They

distilled all the value of IP everywhere

including enterprise everywhere. Like

we're in a battle here. Those things

have to work. There's only one way for

them to work ethically, and that's

called an application layer on the back

of your own compute where you control

the model. There's what a way to get it.

It's not the only way, but the best way

to do it is you buy Palantir, you

install it, you have us do it. That way

works ethically, it's better for the

whole country, and it's certainly better

for our customers. And that's what you

see in our bombastic and astoundingly

impossible [clears throat] to understand

numbers.

>> And it shows in the numbers as you just

shared. What's the runway? What does the

future look like for this specific

business?

>> Well, I think one of the things that

people are going to look like look at

these numbers and they're going to say

they they grew the US at 115%. Why can't

they do that next year? And that's the

answer to a lot of questions. In any

case, I think this is great interview.

>> Thank you for your time, Alex. This was

really eye-opening and helpful to

understand just the the growth

opportunity for Palantir.