Shares of Palantir Technologies (PLTR -7.05%) declined sharply on Thursday, falling 5.9% as of 2:48 p.m. ET, amid broader market weakness—the S&P 500 slipped 0.2% while the Nasdaq Composite dipped 0.4%.
The drop followed a recent New York Times report suggesting that Palantir’s deep ties within the federal government could grant President Donald Trump “untold surveillance power.” The report highlighted the company’s extensive access to government data and its role in applying artificial intelligence (AI) to help agencies analyze large datasets and improve decision-making. While some investors viewed the revelations as a bullish sign for Palantir’s future government business, ethical concerns may have tempered enthusiasm.
CEO Alex Karp pushed back strongly on those allegations during an appearance on CNBC’s Squawk on the Street Thursday. He firmly stated that the company is “not surveilling Americans,” which may have contributed to the stock’s decline.
Karp also addressed growing global competition in artificial intelligence, declaring, “Our allies in the West, in Europe, are going to have to learn from us.” He added, “My general bias on AI is it is dangerous,” continuing, “There are positive and negative consequences, and either we win or China will win.”
Long a vocal proponent of U.S. AI leadership, Karp told CNBC in January that the U.S. must “run harder, run faster” in an “all-country effort” to build advanced AI capabilities. In his latest remarks, he emphasized that Palantir is playing a critical role in advancing U.S. defense capabilities, noting the company’s impact on both national security and corporate efficiency.
“There is no economy in the world with this kind of corporate leadership which is willing to pivot, which understands technologies, which is willing to look at new things, but also has deep domain expertise,” Karp said. “Our allies in the West, in Europe, are going to have to learn from us.”
Despite Thursday’s pullback, Palantir shares have significantly outperformed in 2024 and into 2025, gaining 74% year-to-date as investor confidence in its government partnerships and AI software tools remains strong. However, the stock trades at a premium compared to many tech peers.
“You don’t like the price, exit,” Karp said Thursday, addressing concerns over Palantir’s valuation.
Karp again reiterated that the company is “not surveilling Americans” in response to the New York Times report alleging cooperation with the Trump administration in gathering domestic data.
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