Palantir Raises Concerns Over Chinese AI Startup DeepSeek Amid National Security Issues

On Monday, Palantir Technologies Inc. (NASDAQ: PLTR) issued a warning to its clients regarding the AI models developed by the Chinese startup DeepSeek. The company urged its clients to steer clear of using these AI models due to potential national security risks.

What Happened: Ryan Taylor, the chief revenue officer of Palantir, expressed strong concerns about DeepSeek, stating, "We would strongly discourage it DeepSeek and don’t think any customer in the U.S. government will be able to use it," as reported by Reuters.

Despite these warnings, Palantir has decided not to end its relationships with commercial clients who may still choose to employ DeepSeek’s AI technology. Taylor added that the company recognizes its clients' autonomy in decision-making.

Concerns from Federal Agencies: In light of these developments, various federal agencies, including NASA, have taken proactive measures by prohibiting their employees from utilizing DeepSeek’s technology.

Financial Performance: In a recent financial report, Palantir announced a fourth-quarter revenue of $827.52 million, successfully surpassing the consensus estimate of $775.91 million. Looking ahead, the company expects its first-quarter revenue to fall between $858 million to $862 million, which is notably above projections of $799.35 million.

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Why It Matters: The concerns surrounding DeepSeek’s AI models are indicative of a broader competitive threat. Palantir CEO Alex Karp has pointed out that DeepSeek’s open-source AI model offers substantially lower development costs, potentially giving it an edge in the market.

Moreover, the White House has also raised alarms about DeepSeek, with the National Security Council currently assessing its implications on national security. White House press secretary Karoline Leavitt referred to the rising threat as a "wake-up call to the American AI industry."

An analysis from Graphika, an online analysis firm, indicated that state-affiliated social media accounts in China have actively promoted DeepSeek’s AI models, raising further RED flags about the influence these technologies may exert in U.S. markets.

Price Movement: Following these announcements, shares of Palantir experienced a notable surge of 22.75% in after-hours trading, reaching $102.79, after closing the regular session at $83.74 with a 1.52% increase, according to recent data.

Palantir, DeepSeek, AI