NEW: Palantir Launches Partnership To Tackle Climate Change With Data
Palantir today announced a partnership with Trafigura, one of the world's leading independent commodity trading and logistics houses.
The goal of the partnership is to create an operating system to track the flow of carbon emissions within supply chains for materials used to actually create products.
For example, when a company creates a water bottle, there are usually hundreds of raw materials necessary to actually make that water bottle. All of those raw materials come from different parts of the world, inevitably releasing more emissions to get to the end product.
Palantir wants to use their flagship software, Foundry, in conjunction with the data that Trafigura has on the logistical elements of tracking carbon emissions, to allow companies to better track and manage the flow of their environmental impact.
"The companies are building a platform for oil majors and other commodities firms to vet the environmental impact of their supply chains, applying Trafigura’s data to Palantir’s operating system, known as Foundry.
The effort represents a potentially lucrative long-term opportunity at a time when Palantir’s revenue outlook has fallen short of expectations, with shares trading down 57% this year.
In a joint interview at the World Economic Forum’s annual meeting in Davos, Palantir’s Chief Executive Alex Karp said, “This is going to be one of the biggest things we’ve ever done.” Jeremy Weir, Trafigura’s CEO, said the market is “massive. In terms of size, I think it touches everybody.”
The idea grew out of a pilot last year. Trafigura’s global head of carbon trading approached Palantir with a desire to better assess indirect carbon footprints, known as “Scope Three” emissions."
This Is Why I Invested in Palantir
For those who don't know, I currently have 2176 shares of Palantir as of May 24th, 2022. The reason I initially bought into the company and will continue to buy is for one fundamental reason: I see various use cases for their software.
Palantir is not just another software company to me. If they can execute correctly, they have such a differentiated technology that they can end up building entire "operating systems" for VARIOUS industries.
Healthcare. Blockchain. Financial Services. Energy. Supply Chains.
The list goes on and on. When I first came across them, my simple bet was that if they lay the foundation with their software to be the go-to operating system for different industries, they can capture a certain percentage of the software required to operate in each of those industries.
Palantir launched a partnership with Airbus called "Skywise" in 2017 to transform how airlines did business. It worked. They now are used by hundreds of manufactures, subcontractors, and even the FAA in order to make sure airplanes operate safely and efficiently within the skies.
They then launched a partnership with HHI to create an operating system around the supply chains for shipyard manufacturing and logistics. HHI is one of the largest shipyard manufacturing companies in South Korea.
To dominate different industries, you have to be able to penetrate the industry with a completely different product and then become the first in class product for that industry.
Well, going "net zero" for carbon emissions like every big company states is....
A Data Problem
A data problem. All of it at the end of the day comes down to data. If you watch the video below at the bottom of the article, you will see the partnership Palantir has launched today in action.
One of the most amazing parts of the video was when Palantir described how they don't just visually present the data around carbon emissions within supply chains, they actually allow companies to press one button and get simulations of how they can CHANGE their logistics and supply chains to REDUCE their carbon emissions. This is where the true value lies.
Going back to the water bottle example. Let's say a company wants to reduce the amount of carbon it takes to create a water bottle. It's better for the environment, better for their bottom line, and ultimately better for the long term health of their business.
With all their data in one place within Foundry, Palantir will be able to show them various different routes (essentially business intelligence garnered through the interpretation of data at scale) to give them actionable suggestions that can actually save money and have a massive environmental impact.
This is exactly what Palantir did with BP, and it's why they were able to retain them as a very lucrative client.
For a software to actually be able to provide real suggestion that lead to results is where it can become revolutionary. Companies save time, they can solve meaningful problems (like going net zero) and they don't need to waste the resources on consulting firms to give them fancy presentations telling them what to do.
They just press a button.
If Palantir can create various "operating systems" like they have done with Skywise, HHI, and now Trafigura in more industries and capture a decent percentage of those industries as the leading business intelligence software, they may actually become the world's most
important software company.
It will not be easy. And there is a chance it happens, but doesn't happen to the extent of the "tesla of data" super bull case many people have.
But if any company were to do it, my bet would be on Palantir.
You can watch my analysis to their latest video released this morning explaining the partnership: