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Palantir’s AI Edge? It’s All About the Forward Deployed Engineers
Greetings AI enthusiasts. Palantir’s impressive 64% year over year growth in U.S. commercial revenue was mainly driven by its core operations. Moving forward, the company will also be under pressure to prove profitability in GenAI. Embedding engineers at customer sites to build custom AI tools is one way they have distinguished themselves from others in the fiercely competitive AI space.
In today’s email:
Palantir’s AI Edge? It’s All About the Forward Deployed Engineers
Scale AI and Qatar Are Teaming Up to Bring AI to Schools, Hospitals, and Transport Systems
OpenAI Introduces New AI Model That Understands Images, Diagrams, and Sketches
LATEST NEWS
PALANTIR
AI Spotlight: Palantir Technologies is under pressure to prove its ability to profit from generative AI (GenAI), even as the broader software industry faces uncertainty. The company’s AI strategy centers on customized enterprise solutions and a unique deployment model involving on-site engineers. While GenAI monetization remains limited for now, Palantir's commercial growth and stock performance are standing out in 2025.
Key details:
AI Strategy and Use of Forward Deployed Engineers (FDEs): Palantir places engineers at client sites to build tailored AI tools that are later standardized for broader use.
Current Market Performance and AI Revenue Outlook: Most of Palantir’s revenue growth still comes from core operations, with GenAI monetization expected to ramp up closer to 2026.
Partnerships and Customer Engagement: Palantir is working with companies like AT&T and Walgreens while running AI boot camps to help clients explore custom solutions.
Political Ties and Government Contracts: The company’s stock has benefited from ties to the Trump administration, though defense budget concerns remain a risk.
Palantir’s proactive AI deployment model and commercial momentum position it as a company to watch. However, sustained success will depend on its ability to convert pilot projects into scalable, revenue-generating GenAI solutions.
SCALE AI
image credit: Gonzalo Fuentes/Reuters
AI Spotlight: Scale AI is deepening its global footprint by partnering with the Qatari government to develop AI solutions across public sectors like education, health care, and transportation. The five-year agreement is part of a broader push by Scale to expand its presence in international government work, with anticipated major revenue growth in 2025.
Key details:
Qatar Partnership Scope: Scale AI’s deal with Qatar involves AI tools for sectors including civil service, tourism, education, health care, and logistics, with projects ranging from AI-powered medical scribes to personalized visitor apps.
Education and Civil Service Projects: Planned initiatives include an AI teacher assistant, automated construction permits, and legal/regulatory guidance agents, though specifics may evolve over time.
Revenue Growth and Expansion Strategy: Scale AI expects 2025 revenue to more than double to $2 billion, driven partly by government deals in Asia and Europe and a potential $25 billion employee tender offer.
U.S. Government and Military Involvement: Scale AI recently secured a prototype contract with the U.S. Department of Defense for “Thunderforge,” a flagship AI agent program aimed at supporting military planning and operations.
Scale AI’s growing portfolio of government contracts highlights its push to integrate AI into essential public services. As competitors like OpenAI launch similar government-focused products, Scale is positioning itself as a key player in the next phase of AI adoption.
OPENAI
image credit: Stefano Guidi/Getty Images
AI Spotlight: OpenAI has launched a new AI model called o3, which it says is capable of understanding and reasoning through images such as sketches, whiteboards, and diagrams. Released alongside a smaller, faster version called o4-mini, the rollout marks another step in OpenAI’s efforts to lead the generative AI race against rivals like Google, Anthropic, and xAI.
Key details:
New Model Capabilities: The o3 model can interpret visual inputs and integrate them into complex reasoning, allowing it to handle tasks involving math, science, coding, and low-quality image analysis.
Tool Integration and Availability: For the first time, OpenAI’s reasoning models can independently use tools like Python, web browsing, and image generation, and both o3 and o4-mini are now accessible to ChatGPT Plus, Pro, and Team users.
Product Strategy and Branding: While o3 is designed for depth and accuracy, o4-mini offers speed and cost efficiency; CEO Sam Altman acknowledged ongoing user jokes about the company’s naming conventions.
Safety and Policy Changes: OpenAI stated both models were tested under its most rigorous safety protocols yet, though the company has recently drawn scrutiny for relaxing some safety testing requirements and delaying transparency around certain model releases.
OpenAI’s latest models reflect its push toward more versatile, multimodal AI systems that can move beyond text. However, questions around transparency and evolving safety practices remain key issues as it continues to scale.
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