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Welcome back to DailyPalantir! In today’s newsletter, we’ll discuss Germany wanting Palantir, a congressman leaving congress to join Palantir, and updated Foundry links to project customer count. Let’s get into it!

So, back in April 2023, Germany officials publicly stated they did not want to use Palantir software. Alex Karp confirmed these statements in the Q4 2023 earnings call when he mentioned that countries like Germany and France were trying to build their own version of Foundry, and basically wished them good luck.

Why was Germany hesitant to use Palantir?

The primary issue revolves around data protection, which is a significant consideration in Germany, known for its stringent data privacy laws. The General Data Protection Regulation (GDPR) sets high standards for personal data handling, and there are apprehensions that Palantir's software might not fully align with these regulations.

Another concern is the lack of relevant legislation that would govern the use of such advanced data analysis tools within the country's legal framework. Without clear laws, there is a risk of misuse or overreach, which could infringe on individual privacy rights and civil liberties.

Additionally, the high costs associated with implementing and maintaining Palantir's software are a deterrent, especially when considering the budget constraints and cost-benefit analyses that government bodies must undertake.

• Concerns about compliance with GDPR and data protection principles.

• Absence of specific legislation to regulate the use of advanced data analysis tools.

• High costs associated with the implementation and maintenance of the software.

• Skepticism within the government regarding the adoption of American data analytics solutions.

• Preference for European solutions that align more closely with local data protection standards.

Now, it’s ironic because all of these concerns in Europe about data protection and civil liberties are valid — but they should be aimed at big tech like Meta, Google, etc. Putting those same concerns on the one company that actually cares about those issues and built their technology in a way that embodies those values…was weird.

Well..

It seems like Germany wants back in.

Arny shared a great post over the weekend about how some German officials are warning that if the country does not buy something like Palantir, preferably Palantir, then they will be a world of trouble. Some quotes from the article:

As you can see in the above quotes, it is going to be very difficult for Germany to recreate what Palantir has built.

The reason for this is simple: it’s really hard.

Palantir spent over a decade building out their defense software before they somewhat understood what they were doing and how they were going to sell it in an effective way.

Karp and Thiel have gone on record and mentioned many times how their software played a pivotal role in Europe, and still does to this day, in stopping terrorist attacks before they happen.

One of the key ways Palantir has helped is by facilitating information sharing among agencies. In the past, siloed data and a lack of interoperability between different government departments have hindered the detection and prevention of terrorist activities. Palantir's software allows for secure data sharing while maintaining the necessary privacy controls, which is crucial in multi-agency collaborations.

Furthermore, Palantir's predictive analytics capabilities have enabled authorities to identify potential threats before they materialize. By analyzing data trends and communication patterns, Palantir's tools can alert officials to suspicious activities, helping to thwart terrorist plots in their planning stages.

So, what does this mean for investors?

I believe Germany will be back. I don’t know when, but I do know that given all the geopolitical issues we have going on — this is a very unsafe time. Terrorist attacks, potential invasions, everything happening is justifying an increase in defense spending.

Germany increased their defense budget to $100B last year. While they have the resources and money to incubate and build a company like Palantir, it would be really hard. When it comes to technology innovations, it’s really not about the money. The money, quite frankly, doesn’t matter. Silicon Valley has tried to fund hundreds of companies attempting to do what Palantir does.

When it comes to tech, it’s about building something that actually works and can be trusted. For a Germany company to build something like Palantir, it may take decades. If the only qualm the German government has is around security and data protection, it seems silly for that to even be a qualm given the fact that Palantir’s tech is built with those assumptions in mind. As a result, I do believe Germany will eventually come back given these high ranking officials want to use their software since they know how effective and efficient it will be, but it may take time for them to come back.

Either Square, a popular twitter account that tracks Palantir links, has finished the number of links he found in Q1 2024. These links don’t indicate new customers, but they do show multi-pass login links that lead to a Foundry portal, showing that a company at least has a pilot program with Palantir.

In Q1 2024, it seems like there were more unique Foundry entities out of every Q1 that has happened since the company went public.

I believe end of 2024 or early 2025 is going to be very important for Palantir’s customer count since the pilot programs we have in place, many of them from the bootcamps we are putting forth, will materialize into real customers. Those customers will then turn into top line revenue and likely increase the growth rate, hopefully closer to the 30% CAGR Palantir wanted to do over the past few years. Seeing more Foundry links is encouraging for potential customers going into the future.

From the Milwaukee Journal:

His announcement that he would leave Capitol Hill earlier than expected came shortly after the House passed his bill to force the Chinese-based owner of the video-sharing app TikTok to sell its stake in the app or face a ban in the U.S.

Addressing TikTok had been a top goal for Gallagher and among the recommendations approved by his select committee on China. A Gallagher aide told the Journal Sentinel last week that Gallagher felt he had accomplished that goal and "built such a good foundation" for the committee's next chairman.

So, a politician is leaving Congress and joining Palantir.

My take? Bullish.

We need to get deals done. Mike Gallagher is well connected in the US government. He's going to help Palantir get more deals. Every tech company lobbies and hires people just to help them lobby -- this is no different, it's just the lobbying Palantir will be doing will be to help them win contracts the protect western values.

By the way, we've had lobbying for a while...Palantir announced the Federal Advisory Board back in 2022, filled with high level senior ranking members who used to work in the military, army, etc. to help them navigate the government business.

What’s the Federal Advisory Board? It’s is a strategic body composed of esteemed leaders from the national security, defense, and intelligence communities. The board's primary role is to provide guidance and insights that help Palantir navigate the complex landscape of government contracting. The members of the PFAB bring a wealth of experience and expertise, along with valuable connections within the government. The importance of the PFAB to Palantir's business cannot be overstated. Government contracts, particularly in defense and intelligence, are highly competitive and often require a deep understanding of the specific needs and operational challenges faced by federal agencies. The advisory board's insights can help Palantir tailor its products, such as Foundry and Gotham, to better meet these needs, thereby enhancing the company's competitiveness in bidding for contracts.

I think this only furthers Palantir’s moat in the government. For companies to compete, not only will they need to have the technology required to provide the Army, Military, DoD, etc. with software that is effective — they will also need the relationships and connections. Those take time to build and years of persistence, so it’s going to be harder for other companies to get into the same deals Palantir is competing for in the government space.

Thank you for reading — I’ll see you tomorrow in your inbox!

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