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PALANTIR: GOVERNMENT DOMINANCE VS COMMERCIAL ASPIRATION

Strategic Assessment from June 2030

FROM: Executive Intelligence Unit DATE: June 2030 RE: Palantir's Growth Ceiling: Can the Government AI Company Become an Enterprise AI Company?

EXECUTIVE SUMMARY

Palantir dominates government AI platforms but has struggled to penetrate commercial markets. The company is profitable and growing 36% YoY in government, but commercial revenue is only 18% of total and growing slower than expected.

The strategic question: Is Palantir a government AI specialist with limited upside, or can it become a general-purpose AI platform company?

THE CORE STRATEGIC ISSUE

Government Advantage: - First-mover position (20+ years of customer relationships) - Security/compliance specialization - Government funding is stable and growing

Government Limitation: - Addressable market is $12-20B globally (limited) - Government customers move slowly - Commercial entities don't need government-grade solutions

WHAT THE BOARD NEEDS TO DECIDE

  1. Are we a government company that sells commercial products, or are we an AI platform company that serves government first? This determines strategy.

  2. Commercial penetration: Why is commercial revenue only 18%? Is it a go-to-market problem, a product problem, or a market problem?

  3. How do we compete with Databricks, Snowflake, and other commercial data/AI platforms? Do we have differentiation?

  4. What is our long-term revenue potential? If we stay government-focused, revenue caps at $7-10B. If we crack commercial, revenue could reach $20B+.

STRATEGIC OPTIONS

Path A: Government Specialist - Accept that government is core business - Grow government revenue to $6-8B by 2035 - Keep commercial as feature, not core business - Fair value by 2035: $200-250B market cap

Path B: Enterprise AI Platform - Build commercial products that compete with Databricks, Snowflake - Use government customer base as reference - Target 40-50% commercial revenue by 2035 - Fair value by 2035: $400-600B market cap (if successful)

Path C: Hybrid - Grow government to $5-6B - Grow commercial to $4-5B - Maintain dual identity - Fair value by 2035: $250-350B market cap

KEY RECOMMENDATIONS

  1. Clearly communicate strategic choice. Investors are confused about whether Palantir is a government company or enterprise company.

  2. If Path B: Aggressive commercial expansion. Hire commercial sales/marketing talent. Invest in commercial product development. Compete directly with Databricks/Snowflake.

  3. If Path A: Optimize for government dominance. Double down on government relationships. Build government-specific products. Accept $7-10B revenue ceiling.

  4. Manage Peter Thiel relationship. Thiel's influence is both asset and risk. Ensure governance is clear and stable.

THE CLOSING STRATEGIC ASSESSMENT

Palantir has built an excellent government AI platform. The question is whether that can be a $20B+ global company or whether it's constrained by government market limits.

Clear strategic choice and consistent execution will determine long-term value creation.

This strategic assessment is prepared for the Palantir Board of Directors and C-suite executives in June 2030.