Retail investors are rushing into the space investing trade ahead of the SpaceX IPO, and one ETF has cashed in on the excitement.

Tema ETFs’ Space Innovators ETF, which launched on March 30 and trades under the ticker symbol NASA, crossed $1 billion in assets in just 37 trading days, and by the end of this past trading week, had reached over $2.6 billion in assets.

That rapid rise is due in part to retail investors hunting for exposure to SpaceX before it goes public.

While SpaceX has taken an unusual approach to its offering, setting up access for retail investors through brokerage firms at a level atypical in new deals typically dominated by institutions, the NASA fund is another alternative for investors to gain access to Elon Musk’s rocket company. It already holds privately traded SpaceX shares directly. It is one of the few investment vehicles available to retail investors that does, with SpaceX currently representing around 7.5% of the fund.

“If we’re going to invest in space … We have to offer exposure to SpaceX,” said Maurits Pot, Tema ETFs founder and CEO on CNBC’s “ETF Edge” on Wednesday.

Pot said there is no plan to sell shares once the IPO occurs. “The IPO for us is simply a remarking of the position to market price,” he said.

NASA isn’t the only ETF that has access to SpaceX, though the options are limited. Mutual fund manager and billionaire Ron Baron, a long-time Tesla and SpaceX investor, owns the rocket company through his First Principles fund (RONB). Tesla is the top holding in the RONB ETF, at over 14%, while holding close to 2% of the fund’s assets in SpaceX. The ERShares Private-Public Crossover ETF (XOVR), which offers access to late-stage private companies, also owns shares of SpaceX, which it says are worth close to $300 million based on an expected IPO value of over $1.5 trillion.

Setting a precise valuation for the SpaceX deal remains a point of contention in the market and among investors ahead of the deal’s pricing.

Mike Akins, founding partner at ETF Action, said on “ETF Edge” that the ETF structure itself is what makes this kind of access possible for the everyday investor. “Ten, twenty years ago, you talked about a space theme like this, an investor would have to go out and look up all these companies. Now there’s a ticker,” Akins said.

Todd Sohn, chief ETF strategist at Strategas, noted that several new space ETFs have launched over the past few months, including the Van Eck Space ETF (WARP), the Global X Space Tech ETF (ORBX), and Roundhill Investments’ Space & Technology ETF (MARS), which is itself a signal that retail investors are expected to pursue the theme as they have with other recent thematic trades playing off tech innovation, from AI to quantum computing. “That to me is usually a pretty good read that the industry expects space to be the next big thing,” Sohn told CNBC. “It’s a very similar idea to what AI was a few years ago and continuing on.”

Six space-themed ETFs in all debuted over the past three months. But Sohn cautioned that not all funds are created equal. “It all depends on how pure or watered down the ETF is. So the due diligence for this is really important now,” he said.

There are other ETFs branded under the space investing theme that have been in the market for years already, building portfolios of stocks that include pure-play, high-risk space exploration companies, satellite companies, and broader aerospace and defense sector names.

The Procure Space ETF (UFO), which launched in 2019 and has over $1.2 billion in assets, holds Rocket Lab, Firefly Aerospace, and Planet Labs among its top holdings. The SPDR S&P Kensho Final Frontiers ETF (ROKT), which launched in 2018, also holds Intuitive Machines and Redwire.

The ARK Space and Defense Innovation ETF (ARKX) is a good example of how the definitional set of top stocks can range far across the market, with its portfolio also including Amazon and Deere.

Sohn says investors interested in these ETFs and the space investing theme should consider how much overlap there is in a portfolio with more classic defense industry names, as well as how concentrated the fund is in a small group of high-risk stocks.

“There’s only so many companies who are doing this that are public,” Sohn said. “Some of them may have 30 holdings, some of them may have closer to 50 or so,” he said of the current crop of space ETFs. “I have a feeling once SpaceX is public and trading for some time, you’re going to see some of these funds morph into more concentrated bets, depending on how they are managed,” he said.

That’s another factor for investors to consider: NASA, for example, is an actively managed fund, rather than tracking an existing index of stocks designed to represent the theme, which is the approach of UFO, ORBX, ROKT and others.

Investors will pay more for an actively managed approach from a stock picker in space: NASA has an annual net expense ratio of 0.87%, while ORBX charges 0.50%, and ROKT’s expense ratio is 0.45%.

It is clear that Elon Musk is going to be a big winner from the SpaceX IPO and likely the world’s first trillionaire. But both Akins and Sohn said the biggest risk for retail investors getting in on the space theme is volatility.

The risks in the space market were made vivid this week with the launchpad explosion of Blue Origin’s New Glenn rocket.

“Expect volatility. That is usually what happens with very early-stage industries. There will be companies that outperform and companies within ETFs that fall apart because the business model doesn’t make sense,” Sohn said.

Disclaimer

This report is from this week’s The Tech Download newsletter. Like what you see? You can subscribe here.

Once considered a taboo sector to funnel money into by venture capitalists, defense tech has seen a remarkable shift over the past few years.

It raised just $869 million globally in 2020, according to deal-counting platform Dealroom — a figure that rose more than tenfold to hit $11.2 billion in 2025.

A lot can change in five years.

Rising geopolitical tensions across the world have led states scrambling to modernize militaries and increasing commercial opportunities for new defense startups.

Russia’s war in Ukraine has given rise to a new kind of drone warfare. It also provided a test bed for new defense technology developed by startups, and now tech companies have their sights set on opportunities brought about by the conflict in the Middle East.

Over the past week, defense tech startups in the U.S. and Europe have told reporters at CNBC that they’re seeing increased demand and are eyeing commercial deals as a result of the conflict.

Hours after the first salvos of the U.S. and Israel’s “pre-emptive” strikes against Iran on Feb. 28, the data analytics firm Kpler observed vessels in the Persian Gulf making unusual maneuvers, with location data from ships in the Gulf showing vessels traveling over land and making sharp turns in polygonal paths.

Since the start of the war, similar disruptions to location-based services have surged across the Middle East, affecting mariners, aircraft, and motorists alike.

These disruptions have also exposed key vulnerabilities of the GPS, an American-made system now synonymous with satellite navigation.

For years, firms like Kpler have flagged thousands of instances of oil tankers in the Persian Gulf manipulating onboard Automatic Identification System (AIS) signals — the system used to track vessels in transit — to evade sanctions on Iranian oil exports.

Known as spoofing, this manipulation of location signals allows vessels to obscure their movements, and has long been a tool of “covert” operations, according to Ana Subasic, a trade risk analyst from Kpler.

But since the start of hostilities in the Middle East, location spoofing in the Persian Gulf has surged dramatically. Within the first 24 hours of the conflict, maritime intelligence firm Windward logged over 1,100 different vessels across the Gulf experiencing AIS interference, followed by a 55% increase a week later.

Such forms of electronic interference are increasingly being deployed as defensive countermeasures in modern warfare — similar disruptions followed Russia’s invasion of Ukraine in 2022, according to a CSIS report.

But this interference has also disrupted various aspects of everyday life.

Interference has caused aircraft to appear having traveled in erratic, wave-like patterns; on land, malfunctioning GPS systems have also caused food delivery riders to appear off the coast of Dubai.

The persistent jamming and spoofing activity in the region also poses key public safety concerns, according to Lisa Dyer, executive director of the GPS Innovation Alliance.

Although the blockage of the Strait of Hormuz has significantly reduced shipping activity in the Persian Gulf, foreign-flagged vessels from countries like China and India have still been granted the right of transit.

For vessels still carrying crude exports from the Gulf, accurate positioning data is crucial for mitigating risks of collisions or running aground when passing through the narrow Strait, which measures only 21 miles (33 km) at its narrowest, Kpler’s Subasic said.

Beyond the navigational challenges for vessels and aircraft in the region, interference with satellite navigation systems could also hamper the responses of emergency services which rely on navigation aids, Dyer said, in a call with CNBC.

Other analysts, cited in publications like Al Jazeera, have also attributed the apparent accuracy of Iranian strikes to its use of China’s BeiDou.

Missiles and drones often use a combination of satellite-based navigation systems, and other systems, like inertial navigation capabilities — which operate independent of satellite-based signals — for targeting.

Like the GPS — originally a U.S. Department of Defense project — Beijing developed BeiDou for military use following a perceived over-reliance on the U.S.-made GPS in the 1995 Taiwan Strait Crisis, when GPS disruptions allegedly resulted in the loss of ballistic missiles over the Taiwan Strait.

Now in its third iteration following its launch in 2000, BeiDou has been expanded to a range of commercial applications, and “features the largest network,” when compared against other constellations like the GPS, Europe’s Galileo and Russia’s Glonass, according to Luca Ferrara, general manager of AQNav, SandboxAQ’s navigation product.

While Tehran has not officially commented on its use of BeiDou, Ehsan Chitsaz, Iran’s deputy communications and information technology minister reportedly praised the accuracy and architecture of BeiDou after last June’s 12-day war between Iran and Israel, according to China’s state media Xinhua.

Iranian and Chinese authorities have not responded to CNBC’s requests for comment.

Palantir CEO Alex Karp told CNBC on Thursday that artificial intelligence is giving the U.S. and its allies an edge in the escalating conflict in Iran and across the Middle East.

“What makes America special right now is our lethal capabilities, our ability to fight war,” Karp said at Palantir’s AIPcon 9 in Maryland. He added that another major advantage is that “the AI revolution is uniquely American.”

Karp alluded to his company’s ability to link combat data between the U.S. and Middle East partners that were hit by Iranian airstrikes.

“If you were attacked and you needed to coordinate, you would have to have a coordinating function. There’s only one product that can actually do that for security,” Karp said, referencing Palantir’s platform.

Palantir’s Project Maven is a real-time AI surveillance capability that leverages satellite imagery. The platform was used with Anthropic’s Claude in the capture of Venezuela’s President Nicolás Maduro, according to the Wall Street Journal.

Karp declined to comment on whether Maven was used to kill Iranian Supreme Leader Ayatollah Ali Khamenei in a joint U.S.-Israel military operation two weeks ago.

“I have read that Palantir’s Project Maven is the core backbone of that,” he said, speaking generally about U.S. involvement in the Middle East. “And then I’ve also read that all the allies, Arab and non-Arab in the Middle East, may or may not be users of our platform as well, and that’s expanding rapidly.”

Experts and executives in the industry say AI is pushing the conflict to a new frontier. That was evident when Iran bombed three Amazon data centers in the Middle East last week.

U.S. data centers are increasingly seen as national security assets, hosting critical digital infrastructure used by governments and big companies.

“They’re evil, they’re not stupid,” Karp said. “Look who’s on the list, look who’s not. We’re in the middle of war. You would expect it to be a list of hardcore military companies. They are interested in the things they can’t produce.”

While Palantir may be best known for its defense technology, the company’s commercial business is booming. U.S. commercial revenue jumped 137% in the fourth quarter to $507 million.

Palantir shares are up 12% so far this month, while the Nasdaq is down about 1.6%.

WATCH: Palantir’s Q4 earnings beat

OpenAI CEO Sam Altman met with a handful of lawmakers in Washington, D.C. where Sen. Mark Kelly, D-Ariz., said he raised some “serious questions” about the company’s approach to warfare and its recent deal with the Department of Defense.

In an interview with CNBC’s Emily Wilkins, Kelly said the group talked “in detail” about surveillance and how artificial intelligence systems could be used within a kill chain. He called it a “good discussion.”

“There’s got to be guardrails in place, and we’ve got to make sure that we’re always thinking about the Constitution and making sure that we comply with it,” Kelly said.

OpenAI formed a deal with the DOD late last month just hours after rival Anthropic had been blacklisted by Defense Secretary Pete Hegseth, who declared the company a “Supply-Chain Risk to National Security.”

Anthropic had been trying to renegotiate its contract with the DOD, but the talks stalled over a disagreement about how the technology could be used. The DOD wanted Anthropic to grant the military unfettered access to its models for all lawful purposes, while Anthropic sought assurance that its models would not be used for fully autonomous weapons or domestic mass surveillance.

Altman said in a post on X the day the deal fell apart that prohibitions on domestic mass surveillance and human responsibility for the use of force, including for autonomous weapon systems, are two of the company’s “most important safety principles.” He said the DOD agreed and put them into the arrangement.

OpenAI published an excerpt of its contract with the DOD, which says that the agency “may use the AI System for all lawful purposes.” The company said it’s confident the DOD will not be able to use its AI systems for mass surveillance or fully autonomous weapons because of OpenAI’s safety stack, the contract language and existing laws.

“We think it’s very important to support the United States government and the democratic process,” Altman told CNBC on Thursday. He added that while OpenAI disagrees with the Pentagon’s decision to designate Anthropic a supply chain risk, he thinks the government needs to be able to make decisions about “how the most important things in the country are going to work.”

The clash between Anthropic and the DOD came as a shock to officials and technologists in Washington. Many had come to view Anthropic’s models as superior — they were the first to be deployed in the agency’s classified networks — and championed the company’s ability to integrate with existing defense contractors like Palantir. 

Kelly is working with other senators to draft legislation that would set guardrails around DOD contracts with AI organizations, and said that Congress “needs to have a role.”

“We need to have legislation on this that creates some of these boundaries, guardrails,” he said. “This is the United States Congress, things don’t move as fast as we would like, but this technology is moving very quickly.”

WATCH: Sam Altman on meeting with lawmakers: Economic impact on jobs will be a huge topic

In the aftermath of the Israeli-U.S. strikes on Iran, American allies in the Persian Gulf are hearing a sound that Ukrainian soldiers have long come to dread: the foreboding hum of the Shahed-136 ‘kamikaze’ drone. 

First designed in Iran, the Shahed has already become a fixture of modern warfare, with Tehran’s strategic partner, Russia, utilizing the technology in its years-long invasion of Ukraine.

Now, the drones — the most advanced of which is the long-ranged Shahed-136 — have become central to Iran’s retaliation strategy against the U.S. and its regional allies, with thousands unleashed so far. 

At first glance, the Shahed is unremarkable compared with cutting-edge weapon technologies, with analysts sometimes referring to it as “the poor man’s cruise missile.” 

But while American allies have managed to intercept the vast majority of incoming drones with the help of U.S.-provided defense systems such as the ‘Patriot’ missile, many Shaheds have still managed to hit their targets. 

The United Arab Emirates Ministry of Defence said on Tuesday that out of 941 Iranian drones detected since the start of the Iran war, 65 fell within its territory, damaging ports, airports, hotels and data centers.

Analysts say the key to their effectiveness lies in the numbers. The drones are relatively cheap and easy to mass-produce, especially compared to the sophisticated systems used to defend against them. 

Those factors make the drone ideal for swarming and overburdening aerial defenses, with each drone intercepted also representing a more valuable defense asset expended. 

“The Shahed‑136, among other unmanned aerial systems, has allowed states like Russia and Iran a cheap way to impose disproportionate costs,” said Patrycja Bazylczyk, analyst with the Missile Defense Project at the Center for Strategic and International Studies in Washington DC.

“They force adversaries to waste expensive interceptors on low‑cost drones, project power, and create a steady psychological burden on civilian populations.” 

U.S. government reports describe the Shahed-136 as a one-way attack unmanned aerial vehicle produced by Iranian entities tied to the Islamic Revolutionary Guard Corps.

Compared with ballistic missiles, the drones fly low and slow, deliver a relatively modest payload, and are limited to mostly fixed targets, Behnam Ben Taleblu, senior director of the Iran program at the Foundation for Defense of Democracies, told CNBC.

Public estimates suggest individual Shahed drones can cost between $20,000 and $50,000. Ballistic and cruise missiles, by contrast, can cost millions of dollars each.

In that sense, the Shahed and its equivalents “basically serve as ‘the poor man’s cruise missile’ offering a way to strike and harass adversaries “on the cheap,” said Taleblu.

For Iran, which faces both international sanctions and limitations on acquiring advanced weapons, that cost advantage is significant.

Meanwhile, air defense systems used by Gulf states and Israel can cost between $3 million and $12 million per interceptor, according to U.S. Department of Defense budget documents.

This cost discrepancy raises a serious issue for Iran’s enemies: Air defense systems have finite numbers of defense missiles, with each target intercepted representing a valuable asset expended.

Thus, in a war of attrition, the drones could be used by Tehran to wear down air defenses, opening them up to more damaging attacks, analysts say.

“The logic is to expend drones early while preserving ballistic missiles for the long haul,” said CSIS’s Bazylczyk.

She added that Iran’s ability to sustain mass‑drone use will depend on its stockpiles, as well as its ability to protect its supply chain and manufacturing sites.

The U.S. has long sought to disrupt Iran’s production of the Shahed-136, and recently imposed new sanctions targeting suspected component suppliers across Turkey and the UAE.

However, Russia’s production of Shahed drones shows that such systems can be manufactured at scale during wartime and amid targeted sanctions. 

U.S. officials claim Iran had launched over 2,000 drones in the conflict as of Wednesday. However, the country is understood to have large stockpiles and may be capable of producing hundreds more each week, military experts reportedly told The National newspaper.

“Gulf countries are at risk of depleting their interceptors unless they are more prudent about when it fires those interceptors,” said Joze Pelayo, a Middle East security analyst with the think tank Atlantic Council.

“The depletion is not imminent, but it remains an urgent issue,” he said. However, attacks on multiple fronts by Iranian allies such as Hezbollah and the Houthis could put stockpiles at risk of being depleted within days, he added.

Some analysts have suggested that Iran has drawn from Russia’s extensive battlefield experience with the drones, including modifications such as anti-jamming antennas, electronic warfare-resistant navigation, and new warheads.

Those warheads typically carry 30 kg to 50 kg of explosives and can pack a punch, particularly when used in large swarms, with advanced versions capable of a range of up to 1,200 miles.

Michael Connell, a Middle East specialist at the Center for Naval Analyses, said that the Shahed-136 has proven so effective that the U.S. has reverse-engineered it and deployed its own version on the battlefield against Iranian targets. 

In its Iran attacks over the weekend, the U.S. Central Command confirmed that it had used its drones modeled on the Shahed for the first time in combat. 

With unmanned attack drones becoming a fixture of the modern battlefield, methods for dealing with them are also evolving.

According to Taleblu from the Foundation for Defense of Democracies, Ukraine has found some success in downing drones with fighter jet cannon fire, a more sustainable deterrent than advanced missile interceptors.

Ukraine also recently pioneered the development of cheaper mass-produced interceptors, which Kyiv claims can stop the Shahed.

Gulf states are also expected to adopt more sustainable approaches. The Pentagon and at least one Gulf government are reportedly in talks to buy the cheaper Ukrainian-made interceptors.

Meanwhile, Qatar’s Ministry of Defense says it is using its air force jets to intercept Iranian attacks, including Shahed drones, alongside ground-based air defenses.

Electronic warfare targeting the Shahed’s GPS, as well as short-range missiles and directed-energy systems such as Israel’s Iron Beam, are also significantly cheaper to operate than traditional interceptors.

Still, Gulf states currently lack fast, high-volume anti-drone capabilities, and developing and deploying such systems will likely take years, said Atlantic Council’s Pelayo.

Air taxi maker Joby Aviation in a new lawsuit accused competitor Archer Aviation of using stolen information by a former employee to “one-up” a partnership deal with a real estate developer.

“This is corporate espionage, planned and premeditated,” Joby said in the lawsuit filed Wednesday in a California Superior Court in Santa Cruz, where the company is based.

The lawsuit alleges that Joby’s then-U.S. state and local policy lead, George Kivork, downloaded dozens of files and sent some content to his personal email two days before he resigned in July to take a job at Archer, which had recruited him.

By August, Joby said a partner that worked with Kivork said it had been approached by Archer with a “more lucrative deal.”

Joby alleges that the eVTOL rival’s understanding of “highly confidential” details helped it leverage negotiations.

Joby also said the developer attempted to terminate the agreement, citing a breach of confidentiality.

Archer called the suit “baseless litigation” meant to slow its leading competitor in a statement to CNBC.

“Joby’s case is entirely without merit,” said Eric Lentell, Archer’s chief legal & strategy officer. “The complaint, regarding a non-technical employee who recently joined Archer in a business development role, does not identify a single specific trade secret let alone any evidence of misappropriation.”

Archer said it has rigorous employee onboarding procedures that are meant to prevent the kinds of actions Joby has accused it of.

A hearing is scheduled for March 20, 2026.

Joby said Kivork refused to return the files when approached by the company after an investigation, according to the suit.

The company also claims Archer denied wrongdoing, and would not disclose how it learned about the terms of the agreement or provide results from an internal investigation it allegedly undertook.

Prior to joining Joby, Kivork worked as senior public policy manager at Lyft. He also served as an attorney within the U.S. Commerce Department‘s Office of the General Counsel. In that role, Kivork worked on rules to “protect U.S. manufacturers and exporters against unfair trade practices,” according to his LinkedIn.

The lawsuit comes during a busy period for electric vertical takeoff and landing (eVTOL) technology as companies race to gain Federal Aviation Administration certification to start flying commercially. ‘

The sector has also benefitted from President Donald Trump’s newly minted eVTOL pilot program.

Joby argued in the complaint that it’s “imperative” to protect Joby’s work “from this type of espionage” to promote the sector’s success and ensure fair competition.

Last week, Joby said it completed its first test flight for a hybrid aircraft it’s working on with defense contractor L3Harris. This month, Amazon-backed Beta Technologies, another electric flight company, also went public on the New York Stock Exchange.

Joby shares have more than doubled over the last year, while Archer is up about 36%.

In August 2023, Archer settled a previous legal dispute with Boeing-owned Wisk Aero over the alleged theft of trade secrets. As part of the deal, Archer agreed to use Wisk as its autonomous tech partner.

When Palantir hit the stock market in September 2020, there was a lot that could go wrong. The Covid pandemic was sweeping across the globe, society was in lockdown and markets were volatile.

Meanwhile, Palantir was operating at a loss while dealing with ongoing criticism over its government work, in particular with U.S. Customs and Immigration. And the company was going public through a direct listing rather than a traditional IPO.

At its opening price of $10 per share, Palantir was valued at $16.5 billion, down from its private market peak of $20.4 billion in 2015.

“It was the beginning of the pandemic, no one knew what was happening,” CFO David Glazer said in an interview. “The stock market wasn’t ripping, everyone wasn’t trying to go public, and we decided to go public as quickly as possible.”

Exactly five years later, Palantir has reached heights that would’ve been hard for even the biggest bulls to fathom.

The stock price has surged more than 1,700%, closing on Tuesday at $182.42 for a market cap of over $432 billion. That puts it among the 20 most-valuable U.S. companies, and above tech stalwarts like Cisco and IBM. Last year, Palantir joined the S&P 500, replacing American Airlines.

Quarterly revenue surpassed $1 billion for the first time last quarter, and is expected to reach $4.2 billion this year, according to analysts surveyed by LSEG, up almost sixfold from 2019. The company’s roster of customers grew from 125 in the first half of 2020 to 849 at the end of June. During that time, Palantir has added 1,500 full-time employees.

CEO Alex Karp, who founded the company in 2003 alongside notable investors like Peter Thiel and Joe Lonsdale, was exerting optimism on day one of Palantir’s life on the public market.

“We’ve reached a base where our company is very significant,” Karp, who holds a law degree from Stanford and PhD in neoclassical social theory from Goethe University in Frankfurt, Germany, told CNBC in an interview on listing day. “Being in the public space will help us with our clients and help us grow.”

Its dizzying ascent since then has perplexed Wall Street, which is unfamiliar with these kinds of multiples, especially for companies of this size.

Palantir trades for 226 times earnings over the next 12 months, with a forward revenue multiple of over 80. Those numbers dwarf even the multiples on Tesla, which trades for 194 times forward earnings and 14 times revenue over the next year.

In a report last month, Citron Research’s Andrew Left, a noted short-seller, called Palantir “detached from fundamentals and analysis.” When compared to OpenAI’s recent $500 billion valuation, he said Palantir should be priced at $40, or less than one-quarter of its current price, if it was assessed the same revenue multiple as the artificial intelligence startup.

“Karp and his team should be proud. But for investors, that’s where discipline kicks in,” Left wrote. “Comparison is the enemy of happiness, and when measured against true AI leaders, Palantir’s price already reflects success beyond its fundamentals.”

Karp, who doesn’t shy away from a dispute, recently told detractors to “exit” if they “don’t like the price.”

“We are going to be the most important software company in the world, and people will figure out what that’s valued over a long period of time,” Karp said on the day of the company’s NYSE debut.

Palantir declined to make Karp available for an interview.

Valuation isn’t the only source of controversy. Critics have also raised concerns about how Palantir’s tools are being used by the likes of ICE and other government agencies.

Palantir was founded as a response to national security threats in the wake of 9/11. The company developed hefty software that it helped customize for clients to enable them to compile and analyze large data sets. On its website, Palantir says that it’s partnered with the U.S. Army since 2008, “embedding alongside users to design and deploy modern mission essential software solutions.”

Federal documents from April show that ICE paid Palantir $30 million to provide “real-time visibility” on people self-deporting. Earlier this year, the New York Times reported that Palantir is helping the Trump administration gather data on Americans.

In a blog post, Palantir called the reporting “reckless and irresponsible.” Karp said in a June interview with CNBC that Palantir was “not surveilling Americans.”

In a letter to investors ahead of its direct listing, Karp said, “the engineering elite” of Silicon Valley do not know “how society should be organized or what justice requires” and that the company shares “fewer and fewer of the technology sector’s values and commitments.”

While Palantir has been a standout performer on the market over the past five years, long-term investors had to weather some dark days along the way.

By the end of 2020, Palantir’s stock had jumped to $23.55, a gain of almost 136%. In Karp’s letter ahead of the direct listing, he asserted that “effective software can be essential to an organization’s survival” during times of crisis.

Skepticism started building in the second half of 2021. Early the following year, rising interest rates and soaring inflation pushed investors out of risky securities and into safer assets like bonds. Palantir shares lost two-thirds of their value in 2022, closing the year at $6.42, well below the direct listing price.

But November of that year brought with it the introduction of ChatGPT and a new era of AI that revived and redefined the tech industry.

Palantir launched its AI platform called AIP in April 2023. It was designed to help securely integrate large language models when dealing with sensitive data, making it much faster and more efficient for Palantir’s technology to pull in and analyze information.

The company has attributed much of its expansion in the commercial market to AIP. Government business still accounts for most of its revenue, but Palantir has attracted corporate clients such as Wendy’s and American Airlines.

Glazer said on the latest earnings call in August that the total contract value of bookings in the quarter soared 185% to $1.1 billion, with U.S. commercial revenue jumping 93% from a year earlier.

“AIP continues to drive existing customer expansion and new customer conversions in the U.S.,” Glazer said.

One customer the company cited was auto supplier Lear and a recent five-year partnership between the two. Palantir said that Lear uses AIP for help with “proactively managing their tariff exposure, automating multiple administrative workflows, and dynamically balancing their manufacturing lines.”

Palantir’s stock soared 341% last year and is up another 141% so far in 2025.

The AI is getting a lot of use in government, too.

In 2024, Palantir landed a contract to create AI-powered mobile ground stations able to collect data for soldiers using space sensors. In May of this year, the Pentagon lifted the company’s total ceiling for its Maven Smart Systems contract for AI capabilities to $1.3 billion.

Akash Jain, Palantir’s technology chief and president of its U.S. government business, said in an interview that AI has created a whole new set of risks, forcing the government to rethink how it uses commercial technologies.

 “We’re perfectly positioned for the growth,” he said.

WATCH: Cramer on Palantir