Palantir at its peak: How a CIA-backed company made billions

​Palantir is back in the spotlight. The company reported record growth, proving that it knows how to make money from artificial intelligence. Its story is an example of how a former intelligence contractor became one of the most discussed technology companies in the world.

A report with no weak spots

Palantir Technologies started the year with a report that beat expectations on almost every key metric. In the first quarter, the company’s revenue grew 85% year over year and reached $1.63 billion. Analysts had expected $1.54 billion. Adjusted earnings per share came in at $0.33, while Wall Street had forecast $0.28.

For Palantir, this was not just a good quarter. It was the fastest revenue growth since 2020, when the company went public. Net income grew roughly fourfold over the year: from $214 million to $870.5 million. Since the end of 2022, Palantir shares have risen about 23 times, reaching the current level of $146.

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Palantir’s U.S. business grew the fastest. Total U.S. revenue increased 104% and reached about $1.3 billion. The commercial segment, meaning work with private companies, grew 133% to $595 million. The government segment also accelerated: revenue from U.S. government agencies rose 84% to $687 million.

Palantir now expects full-year 2026 revenue to reach $7.65 billion to $7.66 billion. Its previous forecast was lower, at about $7.18 billion to $7.2 billion. For the second quarter, the company expects about $1.8 billion in revenue, while analysts had projected $1.68 billion.

Palantir CEO Alex Karp described the results in very positive terms. In his letter to shareholders, he said Palantir’s financial performance now “dwarfs” that of almost any software company in history. He also highlighted the company’s efficiency: annualized revenue per employee reached $1.5 million. According to Karp, Palantir has only about 70 salespeople.

Not a chatbot, but a management system

Palantir is often called an AI company, but that is not entirely accurate. It cannot really be compared with OpenAI, Anthropic or other developers of large language models. Palantir is not trying to win the race for the smartest chatbot. Its goal is different: to take the data of a large organization, connect it with its workflows and make AI useful for specific decisions.

The easiest way to explain this is with an example. In a large company, data can be stored across dozens of different systems: sales in one place, warehouses in another, logistics separately, finance separately and contracts somewhere else. Because of this, managers see the full picture with a delay and often make decisions based on incomplete information. Palantir brings this data into one working system where users can not only view reports, but also launch actions.

To do this, the company is developing its Artificial Intelligence Platform, or AIP. The platform connects to a customer’s data and operations and allows AI agents to be used inside real business processes. For example, an agent can do more than just answer a question. It can check inventory, identify a problem in the supply chain, suggest possible solutions and show who should take the next step.

This is why Palantir is different from companies that sell AI as a separate tool for messaging, search or text generation. Palantir sells a system that becomes part of the customer’s work. That is why its product can be useful to an army, a ministry, an automaker or an aircraft manufacturer. In the latest quarter, Palantir announced deals with Airbus, Bain, GE Aerospace and Stellantis. Another example is a $300 million agreement with the U.S. Department of Agriculture: Palantir is expected to help farmers deal with rising costs by bringing data into one system, CNBC wrote.

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Palantir also has another important feature: forward-deployed engineers. These are engineers the company sends directly to the customer. They do not simply sell a license and leave. They work inside the organization, study its data and build a solution for a specific task. Other players have now started copying this model: OpenAI and Anthropic are also developing enterprise divisions where engineers are embedded in customer teams.

AI for war and government

Palantir’s popularity is not growing only because of its business with corporations. The company has found itself at the center of a topic that has become especially important for the United States: how to use AI in defense, intelligence and government management. Palantir has historically been close to this market. Its early investor was In-Q-Tel, the CIA’s investment arm, and its largest customers for a long time were U.S. government agencies and the military. That connection has become even stronger: last year, Palantir had nearly $900 million in contracts with the Pentagon, and earlier the company received a U.S. Army contract worth up to $10 billion over 10 years.

How exactly does the company help the military? One of the main examples is Maven Smart System. It is a digital mission-management platform used by U.S. soldiers. It collects data from different sources, shows a digital map of the battlefield, helps identify targets faster and connects them with available weapons systems. The Pentagon plans to make Maven part of its long-term military infrastructure. According to Bloomberg, Maven is already used across all U.S. regional commands and is being used in operations against Iran.

That is why Palantir’s leadership talks about AI differently from many other technology companies. Chief Technology Officer Shyam Sankar said the war in Iran could be remembered as the first major conflict where AI played a central role. Alex Karp also openly links Palantir with U.S. defense: according to him, if the company believes that American soldiers are in danger, it puts all its resources behind that task.

Palantir became one of the main companies of the AI boom not because it simply added artificial intelligence to an old product. It found itself at the point where several major trends came together: rising defense spending, government demand for fast data analysis, corporations’ desire to use AI in real operations and investor interest in companies that already know how to make money from this technology. In one quarter, Palantir increased its net income almost fourfold, while its market capitalization climbed into the hundreds of billions of dollars. That is why the company’s phenomenon is not only about major contracts and defense ties, but also about how it managed to turn AI into a profitable business for the military, government and large corporations.