When OpenAI and Anthropic enter the "battle for business," Palantir's real competitor has arrived

Palantir is standing at a delicate crossroads: it has completed a transformation driven by the AI wave, but it may also be submerged by the same current.

Wall Street Insights mentioned that after the US stock market closed on Monday, April 4th, Eastern Time, Palantir announced impressive earnings, setting new records in revenue and profit, with US market sales more than doubling year-over-year.

However, the company’s stock price has already fallen nearly 20% this year, diverging sharply from its fundamental performance. Wall Street is betting that as large AI labs like OpenAI and Anthropic accelerate expansion, Palantir’s core software products may gradually lose their appeal to customers.

According to The Wall Street Journal, citing insiders, OpenAI is building a data connection and structured platform, whose functions are believed to directly compete with Palantir, and the team includes former Palantir employees.

OpenAI and Anthropic have also both replicated Palantir’s iconic “Frontline Deployment Engineer” model, embedding engineers within customer teams to promote AI deployment.

William Blair analyst Louie DiPalma stated in a recent report:

The competitive landscape between Anthropic, OpenAI, and Palantir is intensifying.

AI: The Engine and the Hidden Risk

Palantir’s business model is built on data integration and analysis.

Palantir helps government agencies and corporate clients extract insights from massive amounts of information, supporting scenarios like supply chain planning and military strike decisions. The company only turned profitable in 2023, more than twenty years after its founding.

The rise of AI has opened a new window for Palantir: many enterprise clients are adopting large language models from OpenAI, Anthropic, and Google, processing information within Palantir’s data platform, directly fueling explosive revenue growth.

Since launching its AI platform (AIP), Palantir’s stock price has surged by over 2,300%.

****(Palantir officially launched its AI platform in April 2023, after which its stock continued to strengthen)

However, Palantir is fundamentally not an AI company. It does not develop its own models; AIP’s operation logic is to incorporate third-party models to enhance its software capabilities.

According to Palantir employees, large language models are like crude oil, and Palantir is a refinery that extracts usable products from it. But more and more people believe that the “crude oil” will eventually learn to refine itself.

Some experts estimate that large language models can now replicate most of Palantir’s work in large-scale data understanding. Investment firm Direxion’s market chief Jake Behan succinctly summarized the controversy:

The debate around Palantir isn’t about growth, but whether it is truly an indispensable part of the AI tech stack or just an expensive wrapper around increasingly cheap AI models.

Executives Are Defiant, Data Speaks

In the face of external skepticism, Palantir’s management showed their usual tough stance during this week’s investor conference call.

Executives repeatedly referred to outputs from large AI labs as “slop” (garbage content), a term used 17 times throughout the call. CEO Alex Karp said:

Enterprise clients can try various AI products on the market, but most will ultimately return to Palantir.

CTO Shyam Sankar added that cheaper open-source models actually bring more business to Palantir. He said:

As models get better, cheaper, and more capable, we benefit more. These labs are not our competitors; they are part of our supply chain.

But cracks are appearing in the financial data. The growth rate of Palantir’s US commercial contract bookings plummeted from 137% in the previous quarter to 45%.

This gap has raised alarm among analysts, hinting that the momentum of market expansion is waning, and the ripple effects of increased competition may already be emerging.

Government Moat: Deep but Not Boundless

On the government side, Palantir’s barriers remain strong.

With an early advantage in defense and deep political connections in Washington, Palantir secured over $1.1 billion in federal contracts in the first year of Trump’s second term, a 70% increase.

Its command and control system, Maven Smart System, is about to receive “official project record” status—an extremely valuable designation in defense contracting, signifying long-term stable funding.

However, even within the Pentagon, Palantir’s dominant position is quietly loosening.

According to executives at AI startups, the Pentagon is extending AI deployment from headquarters to the front lines, where lightweight models designed for soldiers’ phones or drones often do not integrate with Palantir systems.

Palantir has begun launching a new version of Maven adapted for drones, but how far this chase can go remains uncertain.

Ben Van Roo, co-founder of AI defense startup Legion Intelligence, noted that Maven has achieved success, but it only covers “a subset of thousands of workflows within the Department of Defense.”

Broader battlefield scenarios like intelligence gathering and logistics will generate a large demand for AI outside the Palantir ecosystem. He said:

That will be the main battlefield for the next decade.

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