What Did Alex Karp Mean By Palantir Not Wanting to "Run To The Metaverse?"
Recently, CEO Alex Karp made statements in his opening monologue before Palantir Earnings.
He claimed that Palantir isn't trying to "run to some metaverse," but was rather trying to solve problems that existed on earth.
Like many things Karp says - he usually does so in a timely manner and with a esoteric undertone underneath his statements. Mentioning the metaverse was actually brilliant given how mainstream the word has become in our society. It immediately grabbed my attention to try to dig deeper around what Karp was trying to claim.
After analyzing the monologue, I came to some conclusions around why Alex made this statement and what he actually meant by it:
Premise A: The metaverse is a way to escape reality.
Premise B: Reality is so bad we must escape it.
Therefore, engaging in building the metaverse is a meaningful experience to spend our time and money.
Karp has been vocal throughout numerous instances where he basically calls out larger companies like Facebook for deploying their efforts on things that don't really matter in the world.
In the eyes of Karp, FB is an advertising business. Their full job and focus in the context of applying artificial intelligence and machine learnings is to figure out how they can sell more ads.
For someone like Karp or quite frankly anyone who decides to work at Palantir, the notion of building a career on optimizing ad targeting is just no interesting.
As a result, Palantir explicitly focuses on the value they can provide to the world that can truly earn them the title of "most important software company," which would presumably be using data, AI, ML, etc. to solve the world's toughest problems.
Why The Metaverse Isn't A Noble Pursuit
I tend to agree with Karp here wholeheartedly. I understand the vision for the metaverse - this next wave of computing on the internet that allows new forms of connectivity.
I just personally think its boring. If I could go to a concert in real life, why would I want to do it in a virtual world? I understand wanting to share to the world a photo or video of the concert to gain their feedback on my experience, but the experience itself is what matters.
Replacing the experience to relive it inside of some virtual world is not appealing to me. Nor is wearing some headset in order to enter that experience.
Regardless of if you are a big fan of the metaverse concept, Karp mentioned this statement mainly because of the role Palantir has in solving issues in the real world.
Shyam Sanker describes in a question asked on the latest earnings call the importance of solving issues on the ground:
"I've already talked about how we are helping governments respond to Russia's invasion and the resulting humanitarian disaster from MetaConstellation and Edge AI to powering refugee and relief operations. But it's also important to understand that a chain of events has been set in motion, a Rube Goldberg like set of bangs, boings and ricochets that extend and will continue to extend into every facet of the world. Food is short and prices are exploding. The availability of fertilizer required to grow more food is disrupted. Commodity prices are sky rocketing. Neon gas, CF46, palladium, all disrupted, all crucial in the semiconductor supply chain. Ukraine is a major regional center for clinical trials. All of those trials and the life-saving medicines behind them are now disrupted. Simple, but essential automotive components like wiring harnesses and seat belts are disrupted. All of this is coming on the back of a set of dynamic disturbances from COVID and the resulting supply and demand shocks people are still coping with and the emergent wave of shocks that will come from extended and severe lockdowns in China. To solve these problems, you cannot operate on software that was built to assume a stable world. In the stable world you can make plans and you edit it occasionally. The plan is static. The assumptions are fixed and immutable. In the real world, in this world, you only make a plan so you can change it."
Given problems in the real world exist that need to be solved by someone, why would you build a metaverse? Why would you focus time and billions of dollars in trying to escape reality using the most advanced technology on the planet vs. putting that tech to use in solving the most complex problems humanity faces?
Now, this statement came before an earnings report that was simply not good enough - especially in this macro economy - to keep the stock price a float. To be fair, no company is currently able to save their stock from the fury of the market.
However, it did add some context going into the earnings call. The reason Karp mentioned not fleeing to the metaverse was because he wants shareholders to realize how important the opportunity is to actually focus on the real world.
If Palantir can put all their energy and resources on helping the actual world solve actual problems, they one day may be worth more than all of the metaverse.