Palantir CEO says Israel is the "minor exception" in AI race dominated by U.S. and China
Alex Karp offered no details about Israel’s standing, but singled it out as an exception to a global contest he sees as controlled by Washington and Beijing. He also warned that Europe risks becoming dependent on their technology and that AI-driven wealth could fuel demands for a wealth tax.
Alex Karp, CEO of Palantir Technologies, believes the global race in artificial intelligence has only two serious contenders, with Israel as a partial exception.
“With a minor exception in Israel, they’re the only relevant countries,” Karp said of the United States and China in a conversation with Leon Kalvaria, Citigroup’s global chairman of banking. Palantir posted the video on October 23.
The remark was brief and came without further explanation, but it fits a pattern of Karp treating Israel as a special case. The wider conversation touched on Palantir’s security work, the political risks of AI-driven wealth concentration and his view that Europe will have to buy its AI technology from one of the two dominant powers.
Karp said the competition is increasingly about controlling the entire technology stack, from chips and the software that runs on them to the systems connecting corporate data with AI models, the applications built on top and the infrastructure needed to deploy them without surrendering intellectual property.
“That’s all currently in the Western America and/or in China,” he said. “And everybody who’s not is actually some weird derivative. It doesn’t really count. They can’t compete.”
Karp estimated that the United States has a lead of about six months. He said China’s strengths, including running models with less computing power, offering lower prices and using distillation, a technique for training smaller models on the outputs of larger ones, would remain significant.
“Our advantage is creativity. Their advantage is scale,” he said.
His assessment of Europe was more blunt. The continent, he said, “is going to have to buy one of those products,” a prospect he described as regrettable.
Karp said he would like to help Europe, citing “a lifetime spent there” and his view that he is “partially European.” But, he added, “you can’t help someone who doesn’t want to be helped.”
Israel was the only other country or region he singled out as an exception to the U.S.-China dominance. He did not explain what that exception entails, whether it reflects Israel’s military AI capabilities, cybersecurity industry or startup ecosystem, and he did not name any Israeli company.
Earlier in the conversation, Karp discussed Palantir’s government work and said the company operates under “serious security constraints because of the enormous role we play” in Ukraine and in “certain parts of Israel.” He described the company as helping drive “the transformation of institutions,” but did not specify which institutions or detail the work involved.
Karp has been outspoken about Palantir’s ties to Israel. In January 2024, as CTech reported, the company announced a strategic partnership with Israel’s Ministry of Defense to supply technology for the country’s war effort. The announcement followed a visit by Palantir executives and a board meeting in Tel Aviv. The terms were not disclosed.
During a visit to Tel Aviv University at the time, Karp told entrepreneur Yossi Vardi that “there is no one who doesn’t have an opinion on Israel, especially if you are a big company.”
He has also acknowledged that the company’s position has come at a cost. In March 2024, Fortune reported that Karp had told CNBC Palantir lost employees over its stance on Israel.
“If you have a position that does not cost you to ever lose an employee, it’s not a position,” he said. At the time, he also described Israel as “not a commercially relevant part of our business.”
Much of Karp’s conversation with Kalvaria focused on the political consequences of AI-driven wealth creation. He argued that the greatest threat to American leadership in AI could come from domestic politics, because AI companies are “wealth creation mechanisms.”
He used his own potential gains to illustrate the problem. “Me being 20 times wealthier than I am now is a societal problem,” he said.
Karp predicted that mounting inequality could lead to a populist push for a wealth tax. He called such a policy “crazy,” arguing that it would “shut off innovation” and “kill the startups” that might otherwise challenge established companies such as Palantir.
Enforcing a wealth tax, he argued, would require assets to be valued in real time and could expose details of people’s private lives. “Our products probably could do that,” he said, referring to Palantir’s technology, while making clear that he did not want the company involved in such an effort.
Turning to Palantir’s corporate business, Karp criticized the way companies are paying for AI services without necessarily receiving meaningful value in return.
He said corporate customers are angry about paying for AI tokens that “create no value,” while some of their intellectual property “has been migrated to their competitor.” He said many chief executives describe the experience as “some kind of venereal disease.”
Palantir’s answer, he said, is “sovereign” AI, which allows companies to use the technology while keeping their proprietary knowledge under their own control.
Karp also warned that the latest AI models are “excruciatingly adept” at finding security vulnerabilities. The result, he said, is “more guerrilla war” in cybersecurity, in which success increasingly depends on which side can identify and patch vulnerabilities fastest. No system, he added, offers 100% protection.
