Alex Karp, the frizzy-haired CEO of defense software company Palantir, has become somewhat of a pro at deflecting criticism. As he sat for an interview in April at the tech policy-focused Hill and Valley Forum in Washington D.C. and a heckler started shouting at him from the balcony, Karp retorted rather calmly, telling the audience he believed it was her right to express her views.
But this week—after Palantir reported blockbuster earnings on Monday—Karp took a moment to bask in his company’s meteoric rise and take a jab at his critics.
Palantir, based in Denver, surpassed $1 billion in quarterly revenue for the first time this week, posting growth figures that blew past analyst estimates. Palantir’s stock soared to more than $160 a share, marking a 555% increase from this time last year. By market close on Tuesday, Palantir’s market cap had hit nearly $409 billion, making it the 23rd most valuable company in the world, just behind Johnson & Johnson, a company with more than 23 times Palantir’s revenue and more than 35x the number of employees.
As he started speaking on Monday’s earnings call, Karp, who has a PhD in neoclassical social theory, was absolutely delighted—and true to form, a bit snarky, too.
“Well, as usual, I’ve been cautioned to be a little modest about our bombastic numbers, but honestly, there’s no authentic way to be anything but have enormous pride and gratefulness about these extraordinary numbers,” Karp said. As he wrapped up the call, he gave a quippy message to retail investors about the analysts that have “been wrong about every quarter.” “Maybe stop talking to all the haters—they’re suffering,” he said.
Palantir, a software company co-founded by Peter Thiel, has many “haters,” as Karp puts it. As a tech company that got its start selling to the U.S. military during the War on Terror, Palantir has been fully embedded in some of the most polarizing political debates of modern geopolitics. Particularly now, Palantir has stirred criticism over its software being used by Immigration and Customs Enforcement, as well as the Israeli military.
On the financial side, there’s a different kind of critic: those who question how such a relatively small company—one whose revenue and profits are so small in comparison to peers that it doesn’t even qualify for the Fortune 500 list—could reasonably become one of the most valuable companies in the world.
For Palantir, it has been a slow, albeit volatile, climb to where it is now—marked by contentious legal battles, noisy protests and picket lines, and an eccentric leadership team and employee base who sometimes endearingly refer to one another as “hobbits,” in credit to the company’s Lord of the Rings nomenclature (Palantir is in reference to the seeing stones created by Elves that allow people to see far away or communicate with others). And, more recently, in the last two years, Palantir has ridden the generative AI wave.
“They’ve got their feet under them—they’ve got their sales cycle down a little bit more. They’re just making things really, really sticky for large multinational corporations,” says Evan Loomis, a venture capitalist who is close friends with Palantir cofounder Joe Lonsdale and whose construction technology startup, ICON, uses Palantir’s software platform Foundry.
While the company is currently one of the best-performing stocks in the S&P 500, Palantir’s stock has also been known to be incredibly volatile, and sometimes dramatically influenced by retail investor activity. Palantir is undoubtedly having a moment—but will it last?
‘Two times more expensive’
There are a host of near-term data points analysts look at: sales, cash flow, profit, customer retention. If you look at most of these near-term fundamentals, Palantir is trading at a premium.
“They are trading at least two times more expensive on the traditional metrics,” says Mariana Pérez Mora, an equity analyst at Bank of America Securities, who has been following the company since 2022.
But, as we speak, Pérez Mora reminds me about another important, longer-term metric for SaaS companies that Karp has repeatedly reminded onlookers to pay close attention to. That metric is called the “Rule of Forty.”
The Rule of Forty figure is calculated by adding the year-over-year revenue growth rate and adjusted operating margin. If those percentages are collectively higher than 40%, you have sustainable growth.
If you look at Palantir’s last quarter, Pérez Mora points out, the rule of 40 was 94%.
“That is the type of growth they are having. And the reality is that growth is accelerating, and that accelerating growth is not at the expense of profitability. And that is pretty unique,” she says, adding: “Palantir is trading as the company that they are growing into, and this is why it’s more expensive.”
There are a few key contributors to these numbers. For one, new government contracts.
Palantir has been working with the government since the beginning—its first customer being the CIA—and government contracts still make up a majority of its business. At the end of July, Palantir signed a 10-year contract worth up to $10 billion with the U.S. Army. It was one of the largest software contracts the Department of Defense has ever signed and, by far, Palantir’s largest contract to-date. And, ironically, it is the same customer Palantir sued (successfully) almost 10 years ago, accusing the department of unlawfully excluding companies like Palantir from its procurement process.
There could be more contracts of this scale on the table, too. The Fostering Reform and Government Efficiency Act, or FoRGED Act, currently on the table would reshape the Department of Defense’s procurement process for private contracts, eliminating hundreds of statutes and making it easier for tech companies like Palantir to sell to the government. The legislation, which Palantir has publicly endorsed and which its executives have pushed for in public hearings, would likely cut into the advantage that some of the industry incumbents like Boeing, Lockheed Martin, RTX, and Northrop Grumman have gained over the years.
The Department of Defense has been making trims to its budget since Trump named Pete Hegseth to the top role. But Palantir is seemingly benefitting from that, too. Only a couple months after the Department of Defense said it had cut more than $5.1 billion in contracts to consulting agencies, including Accenture and Deloitte, both companies announced new strategic partnerships with Palantir to collectively deliver solutions to government clients.
But the lion share of growth at Palantir over the last year is coming from a newer segment of customers—the commercial side of the business. Revenue for the commercial side rose 93% year-over-year this past quarter. And nearly all of those contracts stem from the generative artificial intelligence platform it released in 2023, called “AIP” (which stands for the ever-original “artificial intelligence platform”).
Perez Mora says that while a lot of companies are building and offering large language models, Palantir has found a way to help companies make use of them—and drive real results for their businesses.
On this last earnings call, Karp said that Citibank was onboarding its customers and running the relevant know-your-customer and security checks in seconds, down from nine days. He said that residential mortgage enterprise Fannie Mae is uncovering mortgage fraud in seconds, versus two months. And he said that Lear Corporation is using Palantir’s platform to manage tariff exposure.
Investors seem to have taken note, as there is a direct correlation between the launch of AIP in 2023 and the steady upward trajectory Palantir’s stock has experienced since.
But generative AI is still new—and many companies and industries haven’t fully explored or realized just what jobs AI will be able to replace or make more efficient. Palantir itself doesn’t seem to have it sorted out either.
CEO Karp said in an interview on CNBC this week that he thinks Palantir could keep growing revenue while reducing headcount by 500 jobs to about 3,600 people. But if you look at Palantir’s headcount, it has been doing the opposite: adding about 200 people between 2023 and 2024, not cutting roles. For all that companies like Alphabet or Salesforce are boasting of the efficiencies they are adding within their ranks by using AI, those same companies have seen their workforces grow.
One of Silicon Valley’s most controversial companies
Palantir’s valuation may be climbing to new heights, but the company is as controversial as ever. They’ve been the target of sit-ins, picketings, and other protests that have pulled in hundreds of people in New York City, Palo Alto, Denver, Seattle, and Los Angeles, condemning Palantir’s contract with the ICE (Palantir has been running a six-month pilot contract “centered on enforcement prioritization and immigration lifecycle management,” the company says.) Palantir has a partnership with the Israeli Defense Forces for “war-related missions,” which has also come under fire. A report submitted to the UN Human Rights Council in June that singled out companies aiding Israel in the war in Gaza, including Lockheed Martin, said there was “reasonable grounds to believe” Palantir was providing automatic predictive policing technology and core defense infrastructure to Israel.
A Palantir spokeswoman said the company “does not provide the technology for Israel to conduct missile strikes or targeting operations in Gaza and has no involvement in the Lavendar or Gospel systems. These targeting capabilities are entirely independent of and predate our partnership with Israel’s Ministry of Defense.”
Anti-ICE demonstrators gather outside of the Palantir office to protest Palantir Technologies and U.S. Immigration and Customs Enforcement (ICE) in Palo Alto, California on July 14, 2025.
Tayfun Coskun—Getty Images
Karp addressed some of the criticism Palantir has received over the years on the last earnings call. “Palantir gets attacked just because we help make this country even better, because we support the values, because we defend it,” he said. Earlier this year, Karp and Palantir’s head of corporate affairs, Nicholas Zamiska, publishedThe Technological Republic, which criticizes Silicon Valley for spending its time on consumer apps and dodging working with the government and playing a role in defending freedoms and democracy.
But there has also been some notable pushback even from former employees in the last couple years. In May, more than a dozen former Palantir employees signed an open letter to the tech community, alleging that Palantir had violated principles core to the company due to its work with the Trump Administration.
“Palantir prides itself on [a] culture of fierce internal dialogue and even disagreement on difficult issues related to our work,” a Palantir spokeswoman said. “The small number of former Palantir employees—13 of 4,000—raising concerns are certainly entitled to express their views.”
Despite heightened criticism on the public stage, Silicon Valley has come to not only accept, but embrace defense tech since 2022, when Russia invaded Ukraine. It’s one of the hottest sectors around right now, with companies like drone startup Anduril garnering a $30.5 billion valuation in the private markets.
Indeed, tech companies used to shy away from defense contracts. But under the Trump Administration, there’s been a tidal shift. Metateamed up with Anduril to start working on helmet and headset projects for the U.S. military. Numerous LLM companies, including OpenAI, xAI, and Anthropic, started working with the Department of Defense on national security. Even Google, which famously stopped working with the government in 2018 after internal upheaval from its employees, has gotten into the military business.
In some ways, Palantir—and SpaceX, too—have been a catalyst for the shift. Palantir had initially been rejected from top Silicon Valley venture capital firms when the founders tried to raise initial capital, as Sequoia Capital and Kleiner Perkins both famously passed on the investment. Cofounder Thiel ended up putting in much of his own money and raising capital from former officials from President George W. Bush’s administration as well as the CIA’s venture capital firm In-Q-Tel.
Now, with Thiel protegee J.D. Vance as Vice President of the United States, and a defense-tech-friendly White House in charge, the company has access to the inner circle at the highest levels of power. And Karp, who pens a “letter to shareholders” that’s published on Palantir’s site in English, German, and French each quarter alongside the financial results, has a lot of thoughts to share. “The United States is not, and should not be permitted to become, a soft compromise and amalgam of global values and tastes,” Karp wrote in his most recent letter, referencing a 1943 work by C.S. Lewis which describes “men without chests.”
“Such men without chests,” Karp says, “promise to shepherd us forward yet lack much substance and content, even a flicker of an animating worldview or belief structure, other than their own self-preservation and advancement.” For now, at least, Karp’s worldview and Palantir’s business seem to be defying the critics, the haters, and the chestless.
Nvidia CEO Jensen Huang said China has an AI infrastructure advantage over the U.S., namely in construction and energy.
While the U.S. retains an edge on AI chips, he warned China can build large projects at staggering speeds.
“If you want to build a data center here in the United States from breaking ground to standing up a AI supercomputer is probably about three years,” Huang told Center for Strategic and International Studies President John Hamre in late November. “They can build a hospital in a weekend.”
The speed at which China can build infrastructure is just one of his concerns. He also worries about the countries’ comparative energy capacity to support the AI boom.
China has “twice as much energy as we have as a nation, and our economy is larger than theirs. Makes no sense to me,” Huang said.
He added that China’s energy capacity continues to grow “straight up”, while the U.S.’s remains relatively flat.
Still, Huang maintained that Nvidia is “generations ahead” of China on AI chip technology to support the demand for the tech and semiconductor manufacturing process.
But he warned against complacency on this front, adding that “anybody who thinks China can’t manufacture is missing a big idea.”
Yet Huang is hopeful about Nvidia’s future, noting President Donald Trump’s push to reshore manufacturing jobs and spur AI investments.
‘Insatiable AI demand’
Early last month, Huang made headlines by predicting China would win the AI race—a message he amended soon thereafter, saying the country was “nanoseconds behind America” in the race in a statement shared to his company’s X account.
Nvidia is just one of the big tech companies pouring billions of dollars into a data center buildout in the U.S., which experts tell Fortune could amount to over $100 billion in the next year alone.
Raul Martynek, the CEO of DataBank, a company that contracts with tech giants to construct data centers, said the average cost of a data center is $10 million to $15 million per megawatt (MW), and a typical data centers on the smaller side requires 40 MW.
“In the U.S., we think there will be 5 to 7 gigawatts brought online in the coming year to support this seemingly insatiable AI demand,” Martynek said.
This shakes out to $50 billion on the low end, and $105 billion on the high end.
Their long-delayed first face-to-face discussion focused on next year’s World Cup — and included side discussions about trade and tariffs — but immigration was not the top issue. That’s despite Trump’s push to crack down on the U.S.-Mexico border being a centerpiece of his administration, and the driving force in the relations between both countries.
Trump has been in office for more than 10 months, and his having taken so long to see Sheinbaum in-person is striking given that meeting with the leader of the country’s southern neighbor is often a top priority for U.S. presidents.
Trump and Sheinbaum had been set to meet in June on the sidelines of the Group of Seven summit in Canada, but that was scrapped after Trump rushed back to Washington early amid rising tensions between Israel and Iran.
Soccer took center stage — but tariffs still loom large
Trump and Sheinbaum sat talking in the president’s box and also appeared onstage with Canadian Prime Minister Mark Carney at the Kennedy Center for Friday’s 2026 World Cup draw. The U.S., Mexico and Canada are co-hosting the tournament, which begins in June.
A senior White House official, who spoke on the condition of anonymity to discuss private meetings, said Trump, Sheinbaum and Carney met privately after participating in the draw.
Sheinbaum had said before leaving Mexico that she’d talk to Trump about tariffs that his administration has imposed on automobiles, steel and aluminum from Mexico, among other things. She said after appearing at the Kennedy Center that the three leaders “talked about the great opportunity that the 2026 FIFA World Cup represents for the three countries and about the good relationship we have.”
“We agreed to continue working together on trade issues with our teams,” Sheinbaum posted on X.
Mexico is the United States’ largest trading partner. The the U.S.-Mexico-Canada Agreement which Trump forged in his first term as a replacement for 1994’s North American Free Trade Agreement also remains in place. But U.S. Trade Representative Jamieson Greer has begun scrutinizing it ahead of a joint review process set for July.
In the meantime, the U.S. and Mexico’s priorities have been reshaped by the steep drop in the number of people crossing into the U.S. illegally along its southern border, as well as the White House’s — so far largely unrealized — threats to impose large trade tariffs on its neighbor.
Before speaking in-person, Trump and Sheinbaum had repeatedly talked by phone, discussing tariffs and Mexican efforts to help combat the trafficking of fentanyl into the U.S. But despite other world leaders, including Russian President Vladimir Putin and Chinese President Xi Jinping, having already met with Trump this term, the meeting with Sheinbaum hadn’t happened until Friday.
The Trump whisperer?
Waiting so long to meet in person hasn’t seemed to hurt Mexico’s president’s standing with Trump.
The two spoke by phone in November 2024, with the then-U.S. president-elect declaring afterward that they’d agreed “to stop Migration through Mexico” — even as Sheinbaum suggested her country had already been doing enough.
Trump soon after taking office threatened to impose a 25% tariff on goods imported from Mexico in an effort to force that country to better combat fentanyl smuggling, only to later agree to a pause.
The White House subsequently backed off tariff threats against most Mexican goods. Then, in October, Sheinbaum announced that the U.S. had given her country another extension to avoid sweeping 25% tariffs on goods it imports to the U.S. — even as many items covered by the USMCA trade deal remain exempt.
Mexico, though, hasn’t avoided all U.S. tariffs. Sheinbaum’s country continues to try to negotiate its way out of import levies Trump has imposed worth 25% on the automotive sector and 50% on steel and aluminum.
Sheinbaum’s success at mitigating many tariffs, and other successes in the bilateral relationship, has led some to wonder if she has a special gift for getting what she wants from him.
She’s largely pulled it off by affording Trump the respect the U.S. president demands from leaders around the world — but especially a neighboring country — and by deploying occasional humor and pushing back, always respectfully, when necessary.
Sheinbaum also defused another potential point of contention, Trump’s renaming of the Gulf of Mexico to the “Gulf of America,” by proposing dryly that North America should be renamed “América Mexicana,” or “Mexican America.” That’s because a founding document dating from 1814 that preceded Mexico’s constitution referred to it that way.
Still, Mexican officials continue to work furiously to lessen the trade blow from tariffs going into 2026 — levies that could wreck its already low-growth economy, particularly in its all-important automotive sector. Sheinbaum’s government has also sought to defend its citizens living in the U.S. as the Trump administration expands its mass deportation operations.
Sheinbaum’s government also lobbied unsuccessfully against a 1% U.S. tax on remittances, or money transfers that millions of Mexicans send home every year from the United States. It was approved as part of Trump’s tax cut and spending package and takes effect Jan. 1.
Trump’s push for mass deportations
Trump has directed federal officials to prioritize major deportation pushes in Democratic-run cities — an extraordinary move that lays bare the politics of the issues. He’s also deployed the National Guard in an effort to curb crime, which has led to a spike in immigration-related arrests, in places like Los Angeles, Chicago and Washington, as well as Memphis, Tennessee, and Portland, Oregon.
The Trump administration says its priority is targeting “the worst of the worst” criminals, but most of the people detained in operations around the country have not had violent criminal histories.
Such operations often meant targeting Mexican citizens who have lived and worked in the United States for years and may face deportation to a homeland they no longer know well. It also has meant serious threats of declining remittance income, which has fallen for seven consecutive months.
The lower number of illegal U.S.-Mexico border crossings has knocked immigration off its perch as the top agenda item for the U.S.-Mexico bilateral relations for the first time in recent memory.
Mexican officials now say conversations around immigration have shifted toward cajoling countries into taking back their citizens and reintegrating them to keep them from leaving again — a major Trump administration priority around the world.
Cooperation on security
Sheinbaum has blunted some of the Trump administration’s tough talk on fentanyl and drug smuggling cartels by giving her security chief Omar García Harfuch more authority.
Mexico has also extradited dozens of drug cartel figures to the U.S., including Rafael Caro Quintero, long sought in the 1985 killing of a DEA agent. That show of goodwill, and a much more visible effort against the cartels’ fentanyl production, has gotten the Trump administration’s attention.
That’s a significant improvement. Only a few years ago, the DEA struggled to get visas for its people in Mexico, and then-President Andrés Manuel López Obrador accused the U.S. government of fabricating evidence against a former Mexican defense secretary, though he never presented evidence to back up the allegation.
Not everything has gone so smoothly, though. Trump criticized Sheinbaum for rejecting his proposal to send U.S. troops to Mexico to help thwart the illegal drug trade.
Last month, Sheinbaum said there was no way the U.S. military would be able to make strikes in Mexico, after Trump said he was open to the idea. And she has denounced U.S. strikes on boats allegedly carrying drugs in the Caribbean and eastern Pacific.
“The president of Mexico is a lovely woman, but she is so afraid of the cartels that she can’t even think straight,” Trump said earlier this year.
Sheinbaum declined to take the bait — and avoided turning up the political pressure — by sidestepping Trump’s criticism.
___
Associated Press writer Chris Sherman contributed from Mexico City.
A Netflix-Warner Bros. merger would risk a monopsony where a single buyer wields enormous control over the marketplace, the former head of Amazon Studios warned.
Roy Price, who is now chief executive of the studio International Art Machine, wrote in a New York Times op-ed on Saturday that predictions of doom are nothing new in the film industry, pointing to the advent of TV, home video, streaming, and AI.
“But if Netflix acquires Warner Bros., this long-prophesied death may finally arrive, not in the sense that filmmaking will cease but in the sense that Hollywood will become a system that circles a single sun, materially changing its cultural output,” he added. “All orbits—every deal, every creative decision, every creative career—will increasingly revolve around the gravitational mass and imprimatur of one entity.”
To be sure, Netflix has said Warner Bros. operations will continue, and the studio’s films will still be released in theaters. Meanwhile, Warner’s TV channels will be spun off via a separate company, though HBO will be included in Netflix.
But Price said the danger “is not annihilation but centralization,” with the combined company accounting for an even bigger slice of overall content spending.
A reduction in bidders also means less content will be produced, while a separate development culture, set of tastes, and risk tolerances will be sidelined, he predicted.
“A Netflix merger with Warner Bros. would create a monopsony problem: too few buyers with too much bargaining power,” Price explained. “Writers, directors, actors, showrunners, puppeteers, visual effects artists—all are suppliers. The fewer buyers competing to hire them, the lower their compensation and the narrower their opportunities.”
Such reasoning sank Penguin Random House’s attempt to merge with Simon & Schuster that would’ve created a book publisher with too much leverage over authors, he pointed out.
Of course, the remaining players in Hollywood and content creation are giants in their own right as well. A KPMG survey of spending in 2024 put NBC Universal parent Comcast at the top with $37 billion, followed by Alphabet’s YouTube ($32 billion), Disney ($28 billion), Amazon ($20 billion), Netflix ($17 billion) and Paramount ($15 billion). Comcast and Paramount also made bids for Warner Bros.
Theater owners, producers and other creative workers have also voiced opposition to the deal. In addition to the business impact of a Warner Bros. takeover, other opponents raised even weightier concerns.
Oscar winner Jane Fonda sounded the alarm on a “constitutional crisis” and demanded that the Justice Department not use its regulatory power to “extract political concessions that influence content decisions or chill free speech.”
For its part, the Trump administration views the deal with “heavy skepticism,” sources told CNBC. The merger is expected to face exceptional antitrust scrutiny, and Netflix’s $5.8 billion breakup fee is among the biggest ever.
On Wall Street, analysts see a tech angle in the merger, namely the importance of content to train and power the next generation of AI models that will shape the entertainment industry’s future.
The acquisition of Warner Bros. would help Netflix stand out in an AI future, Divyaunsh Divatia, research analyst at Janus Henderson Investors, said in a note on Friday.
“They’re also levering up on premium entertainment at a time when competition on engagement from short form video is expected to intensify especially if AI models democratize video creation at an increasing rate,” he wrote.
Politics8 years ago