Palantir claim “phenomenal” Q2 results due to AI leverage
Palantir, a software systems supplier and US defence contractor, has recorded continual growth in the second quarter of 2025, exceeding $1bn in revenue – a 48% increase over the same period the year before.
Co-founder and chief executive, Alex C. Karp, noted the company realised “the highest sequential quarterly revenue growth in our company’s history.”
The company closed 157 deals of at least $1m, 66 deals of at least $5m, and 42 deals of at least $10m. Looking ahead, Palantir have raised its revenue guidance to $4.142bn to $4.150bn for 2025.
The upward trend comes from Palantir’s use of artificial intelligence (AI).
In a letter to shareholders on 4 August 2025, Karp suggested the ascent comes down to “the remarkable confluence of the arrival of language models, the chips necessary to power them, and our software infrastructure, one that allows organizations to tether the power of artificial intelligence to objects and relationships in the real world.”
Palantir in defence
The launch of the company’s AI platform enables clients to use generative AI models such as GPT-4 on private networks, with applications in the defence sector and beyond. Palantir saw that revenue from contracts with the US government swelled by 14% quarter-over-quarter to $426m.
Such work includes the development of the Nuclear Operating System alongside The Nuclear Company, to deploy what is said to be the first AI-driven, real-time software system built exclusively for nuclear construction, enabling critical defence facilities and capabilities.
This comes after an executive order was signed in May to leverage private sector investment to innovate existing infrastructure and “fully leverage” nuclear resources across the Departments of Defense and Energy.
Other contracts include an enterprise agreement between the US Army, and other Defense agencies, with Palantir to provide the option to purchase the company’s commercial products during over a ten-year period, not to exceed the $10bn cap.
In addition, Palantir’s collaboration with BlueForge, a systems integrator, to accelerate the production of US Navy warships using digital means through its Warp Speed manufacturing operating system.
The US naval industrial base has been an enduring sore spot in its geopolitical ambitions to check the rising naval capacity in China.
Around 70% of Chinese warships were launched after 2010, while only about 25% of the US Navy’s were in the same period, according to the Center for Strategic and International Studies in Washington. Furthermore, the think tank reiterated US Navy estimates that China has 230 times the shipbuilding capacity of the United States.
AI in defence
AI will enable informed decision-making at unparalleled speeds. Defence organisaations must be agile and responsive by design to work effectively and outpace adversaries according to a GlobalData thematic briefing.
At a time when the industry is experiencing a global technology skills gap, tools based on AI, low-code platforms, and automation are more relevant than ever.
This is is reshaping the US government workforce. On the same day Palantir announced its quarterly financials, the Defense Technical Information Center, the repository for research and development information across the Department of Defense, announced it will reduce the civilian workforce to just 40 people, representing a reduction of 80% civilian workers.
