Palantir Gets A HUGE NEW Client
+ AIPCon Is TOMORROW
AIPCon is tomorrow! I’ll be livestreaming the event with Arny. You can turn on notifications for the event here. We’ll do our best to give pre, halfgame, and post game commentary.
This Isn’t Any Ordinary Client
TODAY'S LATEST PARTNERSHIP WILL BE SWEPT UNDER THE RUG BUT IT IS ONE OF THE MOST IMPORTANT ONES IN 2023.
This is a long one but I believe today's press release is the EPITOME of the Palantir thesis playing out in real time.
Let's get into it.
Alright, so...
Today Palantir signed a deal with Babcock - an international defense company headquartered in the UK.
The company is publicly traded on the UK stock exchange and did $5B in revenue last year.
The deal itself is pretty straightforward: Foundry + AIP to help Babcock become a stronger organization, make better decisions, all that good stuff.
However...what the press release really focused on is the relationship Babcock has with UK's MOD (Ministry of Defense) -- basically the equivalent to the United States DoD.
"the partnership will deliver a data picture that will act as a single source of truth across the ecosystem, helping employees make better strategic decisions and align teams to the MOD’s digital defence backbone.."
What's ACTUALLY happening here?
So, The UK really got excited about Palantir back in 2020 when they needed a partner to manage all the data required in distributing vaccines.
Palantir came and flawlessly executed, which landed them a ton of more contracts working in the health sector of the UK, and ultimately got them to the finishing stages of potentially landing a massive $611M NHS contract to be decided in a few weeks.
Palantir came into a country and totally transformed the way government agencies conducted healthcare operations in 2020. By end of 2022...they got a contract for $91M by none other than...
UK's Ministry of Defense.
The contract consisted of the typical work Palantir is used to doing in defense: build software products that protect the Army, Military, etc.
So, 2 years after acquiring the UK government's health agencies as clients because of work in a global pandemic, they get the UK Ministry of Defense.
One year later, they get one of the LARGEST commercial defense companies in the UK that has a very INTIMATE relationship with the UK MOD...
What I see here is the epitome of Palantir's network effects playing out:
Go to new country (UK)
Build amazing products in one sector (Healthcare)
Products are so good another sector calls (Defense)
Sign commercial AND gov clients due to the work that has been done
Palantir isn't just throwing this software at Babcock, they are building custom products for them...which means they aren't JUST working for Babcock, they're working even more closely now with Babcock's biggest client: The UK Ministry of Defense!
The result: likely more contracts for Palantir by the UK MOD that is now literally working with the company to build software products for their commercial partners (Babcock) because the better the software, the better the MOD and Babcock can conduct their own operations given the software is meant to streamline and modernize operational workflows.
It's a TRIFECTA of products, R&D, and potential *new revenue* in the future ALL because in 2020, Palantir showed up and solved some of UK's biggest problems at the time...
On top of that, what will AIP (which was likely given for free to Babcock) be worth to a $5B company?
2M? 5M? 10M?
When Palantir's software is so embedded in Babcock over the next year, will they even want another competitor to Palantir's AIP?
Will the UK Ministry of Defense procure Palantir AIP after using it in tandem with Babcock?
It's these type of network effects that take years to play out, today's PR is a result of what Palantir began in 2020 with the UK...but seeing it play out is just incredible as a shareholder.
They haven't even begun to monetize where these network effects could lead to.
Palantir Onboards a World-Renowned Italian Hospital
A Pioneering Alliance in Healthcare
So, this isn't just any partnership, but one with Policlinico Gemelli, ranked as one of the top 38 hospitals globally. The collaboration aims to leverage AI and data science to reshape the landscape of healthcare. But what does this really mean for the average patient, and why should we be paying attention?
Policlinico Gemelli's digital research center, Generator RWD, is set to use Palantir's Foundry, a platform known for handling extensive and intricate healthcare data. Foundry’s AI prowess will generate real-world evidence supporting clinical and translational research. This includes breakthroughs in drug and indication discovery, elevated patient care standards, and the development of innovative digital medicine solutions.
The Bigger Picture
According to Andrea Galvagni, the Head of Italy at Palantir, healthcare is undergoing a transformative phase, with data and AI at its core. These tools aren't just about new drug discoveries but also improving the hospital experience for patients and streamlining treatment. Think of it as a significant upgrade to the healthcare "supply chain" - ensuring that the right medical tools and treatments are available when and where they're needed.
If you're wondering why this collaboration is noteworthy, consider this: Policlinico Gemelli isn't just a top-ranking hospital in Italy or the US. It's recognized as one of the best on Earth. With rigorous evaluations involving tens of thousands of interviews with medical professionals and patients, this recognition isn't handed out lightly.
Palantir’s Growing Footprint in Healthcare
This isn't Palantir's first rodeo in the healthcare sector. The company has previously announced partnerships aiming to revolutionize medical supply chain ecosystems and deliver integrated supply chain solutions. Major institutions, such as Tampa Bay General Hospital and Cleveland Clinic, have witnessed firsthand the transformative capabilities of Palantir's solutions.
Data security and trustworthiness are paramount, especially in the sensitive realm of healthcare. Policlinico Gemelli’s decision to partner with Palantir reflects the company's reputation as a trusted data solutions provider. It's a mutual recognition that to advance in healthcare, institutions need partners they can rely on.
What This Means for the Future
When top-tier institutions like Policlinico Gemelli opt to integrate cutting-edge technologies into their operations, it sets a precedent. Other leading hospitals and academic institutions worldwide will likely follow suit, leading to a cascading effect of innovation in the healthcare industry.
There’s been a lot of buzz surrounding Palantir's potential partnership with the NHS. With their growing portfolio of collaborations with leading hospitals, one could argue that Palantir is in a strong position to secure this significant deal.
Whether it’s the NHS or another globally recognized institution, Palantir's journey in reshaping healthcare is just beginning. By merging AI and data science with medical expertise, they're not only changing how healthcare providers operate but also improving patient experiences and outcomes.
While the implications of this partnership remain to be seen, one thing is certain: in the evolving world of healthcare, embracing innovation is not just preferable—it's essential.
An Upcoming $1.5B Catalyst for Palantir many have forgotten about
The TITAN contract, which stands for Tactical Intelligence Targeting Access Node, represents the Army's ambition to amalgamate vast swathes of real-time data, offering commanders a holistic view of the battlefield. As global conflict zones become more unpredictable and dynamic, a single unified system would allow decisions to be made at unprecedented speeds. This contract, expected to be decided by year's end, has captured the business world's attention and might reshape the trajectory of military tech operations. Palantir and Raytheon were both awarded 36M last year to build prototypes for the project.
The Stakeholders in Focus
While many were aware of the upcoming TITAN decision, a recent Defensescoop.com article on September 1st brought it back to the forefront, indicating that the verdict might be closer than anticipated. Both Palantir and Raytheon have previously been awarded $36 million each to showcase their capabilities for this project, setting the stage for a nail-biting competition.
Raytheon, a defense titan with a storied legacy, recently underwent an internal reshuffle, positioning its TITAN pursuits under its Collins and RTX business arms. Meanwhile, Palantir, the younger yet potent competitor, has a track record of snatching high-profile tech contracts, including collaborations with institutions like the Cleveland Clinic.
Both contenders recently underwent "soldier touch points" – rigorous testing phases where their technologies were put to real-world operational scenarios. Spread across eight touchpoints, this process allowed the Army to assess each system’s adaptability and efficiency. Moreover, the continuous feedback loop during these tests underscores the Defense Department's commitment to creating a refined, top-notch product.
The Stakes: Beyond the Immediate Contract
While the immediate focus is on the TITAN contract, it's crucial to underline its broader implications. Recent disclosures indicate that the Army plans to inject a whopping $1.5 billion into system procurement over the next five years. Whether this amount goes to Palantir, Raytheon, or gets divided remains speculative. However, it does highlight the Army's fierce commitment to modernizing its tech operations.
It's no secret that governmental agencies have deep pockets, thanks to taxpayer funds. In recent years, we've observed several agencies, including the CDC and special ops, commit millions towards technological advancements. If Palantir secures the TITAN contract, it could serve as a testament to its stronghold in governmental tech spheres, potentially leading to more lucrative opportunities.
The JP Morgan Factor
Interestingly, JP Morgan's recent bearish stance on Palantir's growth in the government sector has caused ripples in the market. They argue that the space is becoming fiercely competitive, with giants like C3.ai and Oracle also in the fray.
However, if Palantir manages to clinch the TITAN deal, it might offer a counter-narrative to JP Morgan's skepticism, reinforcing its prowess. Getting contracts like these are what Palantir needs to truly stand out and prove their government business is growing fine.
The Road Ahead
As the decision looms, two possible outcomes emerge: Palantir could either win the contract outright or might have to share it with Raytheon. While both scenarios offer their own set of challenges and opportunities, what's certain is that the Army's modernization ambitions are set to transform the tech landscape.
As the Army delves deep into its TITAN aspirations, the world watches with bated breath. This contract doesn't just represent a technological leap but also signifies a shift in global military paradigms. For Palantir and Raytheon, the stakes have never been higher. Whatever the outcome, the reverberations of this decision will be felt across the tech and defense sectors for years to come.
A Photo That May Warm Your Heart
On the eve of Palantir's AIPCon, CEO Alex Karp spent a few hours with Tesla CEO Elon Musk discussing AI regulation. Karp is now on a private flight to Palo Alto preparing for his company's second conference in 6 months highlighting the future of where AI will be implemented within the enterprise.
See you tomorrow :)
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