How Palantir won over Washington—and pushed its stock up 600%

Palantir's blind run into AI has positioned the company as a power player in the Trump administration

- Heather Somerville, Vera Bergengruen & Joel Schectman

In early 2023, Palantir Chief Executive Alex Karp publicly announced the company had a new artificial-intelligence product that was "currently under development." Palantir engineers were stunned. They weren't building any such product. But Karp recognized where the world was going and, as he had done before, he put Palantir Technologies in the white-hot center of the latest trend reshaping the global order. His engineers, he assumed, would figure out how to build it. They did.

The blind run into AI is one of a series of decisions by Palantir that have positioned the company today as a power player in the Trump administration, an integral tool for national security and the most expensive stock in the S&P 500. On Monday, it reported its best-ever earnings with more than $1 billion in revenue in the second quarter, 53% growth in earnings from U.S. government contracts and total booked contracts valued at $2.3 billion.

Its stock, already at a record and up more than 600% from a year ago, soared another 7.9% on Tuesday.

The company's transformation from an awkward Silicon Valley upstart trying to make it as a government contractor has also emboldened it. Some of its recent and prospective deals toe the lines of what even some of the company's current and former employees consider a violation of ethical applications of AI and moral uses of software by government—and Palantir is unapologetic.

As it has ascended, Palantir's leadership has adopted a persona not unlike President Trump himself: taunting its critics, lambasting the media, and showing contempt for the departed employees who have sounded alarms about Palantir's recent work. In particular, some former employees have said they viewed the company's assistance on Trump's aggressive immigration enforcement as potentially eroding the company's own civil-liberties policies.