Palantir CEO Alex Karp discusses economic and geopolitical outlook from Davos

Alex karp thank you for being here I'm very happy how many times have we been doing this many many times yeah and we've been through a bit of a roller coaster in terms of the economy in terms of the world geopolitics and everything where what is your sense now and what's do you think the sensibility is here right now look we've been meeting for many many years and when we first met here and you uh film me the idea that the world is just jointed violent unlikely to be pure and Global that world leaders would fight more than they get along that there would be derision and division into major democracies and that we'd see a war in Europe looked like the nightmare fantasy of uh uh something that you would not believe could happen and of course we built our company and the idea that the world is disjuncted violent but could be made better I think the core issue for people behind closed doors at Davos is okay clearly the world is not going to be the way we thought it is it clearly is not that not going to be more peaceful less disjointed how can we still make the world actually function in a separated disjunct jointed world where there is war in the heart of Europe where Western allies are having to mobilize against their adversaries including Russia and China where people still want to have industry where Supply chains are disrupted and where we have pandemics your personal optimism or pessimism though right now I mean there's a lot of pessimism here yeah I'm look we built our company and I believe in addressing the world as it is we've built our company around the way the world is now I am pessimistic about the near future very optimistic about what we can do to help that so I agree with people around here but you understand both in the especially in the tech industry and to some extent here but you have people that were just certain they were going to win everything was going to break their way sure no one would go out with them in high school but they're going to own the high school and they're going to own the whole state and everything's going to work out and you know the gazillion dollars and all of a sudden all these assumptions aren't actually true and you know they're in a little bit of a depression Funk uh and that's that's normal when things do are not breaking your way when the world has changed in a way but you know there's a lot of ways to actually make the world a better place first of all the West can show we actually have Superior technology and we're showing that when you said your pessimistic short term what do you mean by that well I mean I think that we are just learning as World organizations how to live in a world that is very different than we thought so I don't think the war is likely to end in in Ukraine I don't you don't I think look it's very hard to know what's going to happen but you have an adversary who is zero-sum if Putin goes home and says hey we lost that he will lose his life his friends will lose their life they'll lose all their money uh and and he'll go to his grave feeling that he lost which he does not want to do we in the west most of us in the west correctly believe if we allow these kind of things to happen if we allow people to violate the sovereignty of a land and rape pillage and Destroy people who are innocent in that land that this will set a horrible precedent so we can't allow that to happen also we've shown that we develop Superior technology and combined with Heroes on the ground we can actually win uh and so this is just still a class of culture that's a pessimistic view geopolitically of potential War and the like what's your view of the economy and the ramifications and maybe it's a ramification of war no I think I think the chief thing hurting the economy is we're in an unknown Zone where things are happening we didn't plant like Wars trying to deal with the wars inflation what do we're also highly divided inside of our countries in the west what do you make of you have a lot of corporate clients here it's not just uh governments the feeling from them their ability to buy spend more or not right now well they're gonna just like in a war situation because our clients are not in a war situation where they're it's like not like the Ukraine but de facto it's the same thing we have to survive under much harsher conditions and what are they going to do they're going to figure out what works what doesn't what's a PowerPoint what's a fraud what's actually transferring the business American businesses here by and large have a huge Advantage which America underestimates what makes Americans interesting we are very very pragmatic we adapt we learn we change you said what's a PowerPoint and what's a fraud and the reason I raise it there's a lot of people who are running around either trying to pretend they're businesses like yours or pretend they're all sorts of businesses what do you think of the washout that's happened in Silicon Valley across the world it's very very very hard uh to be joyous because people are in pain but I mean we compete against Powerpoints and basic and technology that is useful but not transformative what this situ what situation like the current one we're in whether it's war in Ukraine like why did they adopt palantir because you can't afford a PowerPoint or a PowerPoint when your life is on the line what's gonna have what's happening to businesses their revenues are going down there's highly the regulation is going up their Workforce is unhappy for lots of reasons they have to somehow rebuild their culture and attack and that exposes things in your business that are both good bad ugly and transformative right um and of course everybody wants to be like there's the palantir of my cockroach.com farm like and it's like we are the best pounder for making sure that cockroaches and others get proper nutrition and yeah that works under bad conditions but it does not under good conditions does not work under bad conditions what do you make though of the valuations that have taken place in Tech land including to your own company look we've been at this for almost 20 years our valuation has been very high and very low what we're very interested in is how is the business deals doing I run this business for better or worse I know how the business is doing and by the way over the medium term not the short term valuations do affect our reflect the health integrity and success of a business and in the short term that fluctuation evaluations expose people are out on the beach naked you know if you're out swimming naked which by the way I embrace it's kind of hard when the you know it's just like if you're out here without the proper coat it will it exposes the weakness in certain businesses in the end especially in America were adaptive the stronger businesses will grow Thrive expand and we'll end up with a much better what do you tell investors who say look this stock has fallen uh I mean I can tell you well investors I tell our employees look there's market conditions that affects the share price but is it market conditions is it the way the market views your particular company that there are investors who are frustrated with what they call dilution right there are a lot they're legitimate and concerns we have to address to dilution what are the revenues going to be where the revenue is going to develop how transformative the products all legitimate concerns what the investors we have primarily are most important investors are co-workers what we believe is our business is strong in this effort bit right and we have a lot of evidence that convinces us we believe our conviction will will convince the world over a multi-year period and that's what I care about right and and that but the question is were the valuations before when this stock was a 40 stock look I say to yourself that was Alice in Wonderland crazy town let me tell you something one of the things that's been most helpful about writing this company is that when you're kind of like outside the norm a little bit of a freak Show like I never thought we were that good when the share price was 40 whatever I didn't think we're that bad when the share price is six or whatever it is I know that I know what makes the business strong and I'm focused on that and I honestly never thought I was that perfect at 40 I don't think I'm that bad now I think it's just like you work on the business you're working you have a huge problem if you're like full on like normal Silicon Valley capitalists pretending you care about out tourism or whatever that you actually judge your life by the share price let me just ask you one other investor related question which is who should the investor base compare your company to so some people say oh it's a consulting company we should look at Accenture it should be a multiple of that or not other people say oh it's a software company should be in the middle maybe if you doubt what our company is talk to the ukrainians talk to the CEO of Hertz talk to BP talk to the Special Forces they'll tell you this product saved my life or made my company better and you know if you don't have to believe me believe them it was a fascinating piece in the Washington Post that really described what palantir has done in its involvement in Ukraine in a very detailed way I mean you you've alluded to it some of the interviews that we've done over the years how how is that changing the business and now that that's public if you will is it change the kind of conversation you can have look we built PG which single-handedly stopped uh uh the rise of the far right in in in in Europe we built Foundry which uh was just it was used to distribute the covet vaccine and saved millions of lives globally we built what we call multi-consolation and what's often called the digital kill chain um and their category defining products so when you deliver these products to the market just honestly people say this isn't going to exist this isn't valuable but then it changes the market and then the market is the palantir market now that doesn't mean everyone in the world is going to buy our product but it means most of the sensible people in the world are going to Define buy from the category we defined and that is exactly what's happening in the war fighting context and it's happening because of I mean you have to look at this you have a small country that galvanizes its country brings this heroism for and there are up against the third most important army in the world and they win they every single country in the world that finds out they ask well how did you do it what can we do what is the cost of that how long does the implementation take I always ask you this but given the increasing tensions it appears between the US and China where are we what are our capabilities and what do you worry about the the we are very lucky the Chinese Chinese government is very focused on internal security the U.S has to heavily heavily and its allies focus on external security we are better at software than the Chinese but we're also better at focusing on something we care about how do you repel an adversary that wants to invade your territory it should be the single focus of the and we are partly because we're better at and partly because that's if we had a conversation here in 10 years time would China have taken Taiwan tried to take Taiwan what do you think happens I think it largely depends on how powerful our software Hardware hero quotient is if we continue to do what we're doing the Ukraine look if Russia had known what Russia knows now I think there's a pretty strong chance they would not have invaded most companies were not prepared for bad weather like we were stay away from companies that are not prepared for bad weather that was the lesson but you invested in companies that were were not prepared for bad weather exactly we should be more investing in ourselves not investing in companies that are not prepared how did that happen look we are the world's best in my view of building software before people need the software you make mistakes along the way we made a mistake we corrected it we're moved on

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Id: sgl6YSpfwRw

Length: 11min 26sec (686 seconds)

Published: Tue Jan 17 2023