February 27, 2024

Palantir has long positioned itself as a leader in technologies that will define the modern battlefield. The contours of that battlefield are now coming more clearly into view, says Alexander Karp, CEO of the data analytics company,.

Referring to ongoing wars in Europe and the Middle East, Karp noted in the company’s latest earnings call that Palantir has played key operational roles in supporting Ukrainian and Israeli forces. The possibility that the US may be drawn into multiple conflicts will require advanced software to ensure American competitiveness, he said.

Palantir’s stock surged on Tuesday on record profits .

“If we are forced to fight a three-pronged war, you cannot do that even from a perspective of keeping ammunitions ready without accurate software,” Karp said. “So, the more dangerous, the more real it gets, the more battle-tested and real your software has to be.”

And “it’s about to get very real,” he said. “Why? Because [US] GDP growth is significantly better than China’s.”

Slowing economic growth in China could nudge Beijing toward taking aggressive action sooner rather than later because Chinese officials will think “America is going to be stronger tomorrow than today,” he added.

Getting real—but not necessarily on the battlefield

It makes sense for a company that depends on lucrative military contracts to make this assessment, and to air it publicly. Whether the scenario presented by Karp is the most likely one is another question.

One could argue, for example, that weak growth at home could push Beijing toward focusing even more on shoring up its domestic economy instead of diving into a costly and chaotic war.

Another argument might posit that China doesn’t need to feel existentially threatened enough by a slowing economy to take a high-risk bet on war. Indeed, even a slumping China remains a formidable economic and geopolitical force—as demonstrated by its large share of global manufacturing and its surging exports of batteries, electric vehicles, and solar panels.

Or as China expert Richard McGregor notes in a recent op-ed: “Even with many weakness, China’s party-state has another strength – the ability to [mobilize] capital, people, resources and technology, for a singular purpose.”

That purpose, in Karp’s assessment, may be to wage war. Or it could simply be to become the globally dominant player across critical industries and technologies—which itself would be a crowning victory, achieved without a shot being fired.

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