Palantir CEO Alex Karp: There are '2 AI markets' right now

Palantir (PLTR) co-founder and CEO, Alex Karp, sits down with Yahoo Finance anchor Josh Lipton to discuss the next leg of the artificial intelligence (AI) trade and whether we're currently in an AI bubble or at the start of a longer-term growth story.

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Video Transcript

00:00 Speaker A

So there's really two AI markets from Palteer's perspective. People using AI, call it enhanced intelligence to do basic things, but things that are not sophisticated enough so that they would change your revenue or margins. That that is a very large market.

00:19 Speaker A

Um, you you one could argue as an informed citizen that that market is very large, but does may not create enough value to justify the actual costs of large language models or their implementation.

00:37 Speaker A

The the the our what we see on the ground, not again, not not as an opinion, but as like a a fact is a subset of that larger AI market, I would call AI that works either in a way that it can change the battlefield, or it can change your margins, or it can change your revenue.

01:00 Speaker A

And by the way, can do it in a way that's so quickly that you can do it in the public sphere, so you can do it as a public company, you don't have to inherently take the company private, although you can do it in the private context, or you can do it so quickly, you can change things on the battlefield.

01:17 Speaker A

That portion of the market, uh, so the subset of AI where you can show quantifiable results, again, life and death, safety results, or results so that margins or revenue actually change dramatically and quickly enough so that you can capture the value while you're still running the company in the in the structure as it exists now.

01:42 Speaker A

So it used to be to do these things, you had to isolate, essentially isolate an institution. I want to rebuild my military, I want to rebuild a company. I want to change the trajectory of my private company.

01:54 Speaker A

The timeline on that and the what you would have, the violence involved meant that you had to take it offline for five years. Okay, that that's a really, and sometimes you still have to do that.

02:04 Speaker A

What the special thing about the category we're in is you can do all that so quickly, uh, that you can show quantifiable results.

02:15 Speaker A

And that portion of the market is expanding as a subset. So if the whole AR market is here, this was a tiny subset. That is metabolizing the rest of the AR market. And so, what we see on the ground is, uh, it's a it's the people are very, very receptive under the condition

02:37 Speaker A

you can show it having worked in a similar environment somewhere, anywhere on the globe.

02:45 Speaker A

So, the part of the market that is is weak, that where people talk about a bubble is in the institutional context, so not consumer internet, where you can never, you cannot show the thing having worked.

03:00 Speaker A

That part of the market is is very weak and dissipating. Now, the part of the market we're in, which is we'll show you the results quickly and we'll get paid a subset of it. Uh, that part of the market's getting bigger and bigger and bigger, and that part of the market is going to dominate the rest of the market in the institutional context.

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