The chief technology officer of Palantir Technologies on Monday sounded off on U.S. competition with China on artificial intelligence, calling it an "AI arms race." Palantir stock jumped on its fourth quarter earnings report.
Speaking on the Palantir earnings call with Wall Street analysts, Chief Technology Officer Shyam Sankar commented on the sudden emergence of startup DeepSeek and other issues.
"I think the real lesson, a more profound one, is that we are at war with China. We are in an AI arms race," he said.
"This war started long ago. It was an economic war with the ascension of China to the World Trade Organization (in 2001), the greatest intellectual property theft in history, the greatest wealth transfer in history," Sankar said.
He added: "It is an opium war. The number one cause of deaths of 18- to 45-year-olds in this country is fentanyl. That is coming from China. It is a diplomatic war. The Belt and Road Initiative (infrastructure projects across Asia and Africa) is basically indentured servitude for other countries to the CCP (China Communist Party). And the unprecedented gray zone operations of the CCP — how many times are we going to believe that anchors are dragged across the sea that cut undersea cables?"
On the stock market today, Palantir stock jumped more than 21% to 102 in early trading.
The U.S. aims to stay ahead of China in the race to develop AGI, or artificial general intelligence. AGI capability is considered the highest form of AI, featuring humanlike or better cognitive capabilities.
The AI trend has relied mainly on large language models, or LLMs, which require massive amounts of data to be trained. Large language models allow users to interact with AI systems without the need to write algorithms.
The capabilities of open-source models, which are free to developers, have advanced rapidly. As a result, prices have been falling rapidly for software developers renting AI models via cloud computing services.
Palantir Stock: AI Prices 'Dropping Like A Rock'
"I think one of the obvious lessons of DeepSeek-R1 is something that we've been saying for the last two years, which is that the models are commoditizing," Sankar said. "Yes, they're getting better across both closed and open, but they're also getting more similar. And the price of inference is dropping like a rock. But I think the real lesson, a more profound one is that we are at war with China."
Reported after the market close on Monday, Palantir earnings for the fourth quarter were 14 cents on an adjusted basis, up 75% from 8 cents a year earlier. Revenue climbed 36% to $828 million, the maker of data analytics software said.
In Q4, US. commercial revenue grew 64% year-over-year to $214 million. U.S. government revenue grew 45% to $343 million.
Analysts had predicted earnings of 11 cents a share on revenue of $776 million.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
