Palantir (NASDAQ: PLTR) CEO Alex Karp is making a pointed argument that the AI industry’s biggest obstacle is not compute power or model size, but trust.
Appearing on CNBC’s “Squawk Box,” Karp said the AI boom has produced a problem that most businesses are reluctant to acknowledge publicly, centered on what they surrender when handing data to outside AI providers.
Karp identified the core issue as a trust gap between enterprises using AI and the frontier labs supplying the underlying models, arguing clients have a “level of discomfort and loss of trust.”
He said that in sensitive sectors, data, intellectual property, and mission-critical decisions cannot be treated like ordinary software inputs, making the stakes fundamentally different from conventional technology adoption.
Karp argued that large language models alone are insufficient, saying companies in battlefield, manufacturing, clinical, and regulated environments need an application layer that makes AI “safe and useful and precise.”
That argument positions Palantir’s Ontology platform as the critical control system, keeping models functional without allowing sensitive data, prompts, or business logic to leak outside the enterprise.
The trust concerns Karp raised are backed by industry data, with Cisco’s 2025 Data Privacy Benchmark finding that 60% of respondents worry GenAI inputs could be shared with the public or competitors.
The same study found that 58% of respondents worry AI tools could harm a company’s legal rights or intellectual property, while IBM separately found that 97% of organizations that suffered an AI-related security incident lacked proper AI access controls.
Palantir stock has gained 11% over the past week, a potential signal of a break from a broader downtrend, though shares remain down 30% year to date and 22% over the past month, according to Seeking Alpha.
The stock trades at over 85 times forward non-GAAP earnings, a premium that sits 240% above the sector median, according to Seeking Alpha, though it remains at a sizeable discount to its five-year average.
Karp’s trust narrative gives Palantir a framework to defend that premium valuation if Ontology becomes a required infrastructure layer for responsible AI deployment across large enterprises.
The central execution risk remains whether the trust argument translates into larger contracts, faster commercial adoption, and sustained margin strength that justifies investor confidence at these multiples.
Wedbush analyst Dan Ives maintained an outperform rating with a price target of $230, arguing Palantir remains a premium AI software asset despite recent share price weakness.
Rosenblatt reiterated a buy rating with a $225 price target, backing Palantir’s Ontology platform as a durable competitive moat within the broader enterprise AI landscape.
