Palantir Sounds Alarm On China's DeepSeek, Citing National Security Threat — But Won't Drop Clients Who Use It

On Monday, Palantir Technologies Inc. PLTR advised its clients to avoid using AI models from Chinese startup DeepSeek.

What Happened: Palantir’s chief revenue officer, Ryan Taylor, stated, “We would strongly discourage it [DeepSeek] and don’t think any customer in the U.S. government will be able to use it,” reported Reuters.

However, despite these concerns, Palantir will not sever ties with commercial clients who choose to use DeepSeek’s AI models, Taylor added.

See Also: Aravind Srinivas, CEO Of Jeff Bezos-Backed Perplexity, Reveals Why Most Startups Fail: ‘The Thing That Most People Get Wrong…’

Federal agencies, such as NASA, have reportedly banned the use of DeepSeek’s technology by their employees.

Palantir reported fourth-quarter revenue of $827.52 million, surpassing the consensus estimate of $775.91 million. For the first quarter, the company anticipates revenue between $858 million and $862 million, exceeding projections of $799.35 million.

Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox.

Why It Matters: Palantir CEO Alex Karp has previously highlighted the competitive threat posed by DeepSeek’s open-source AI model, which offers lower development costs.

The White House has also placed DeepSeek under scrutiny, with the National Security Council reviewing its implications. White House press secretary Karoline Leavitt described the situation as a “wake-up call to the American AI industry.”

A report by online analysis firm Graphika revealed that Chinese state-affiliated social media accounts promoted DeepSeek’s AI models, contributing to a significant downturn in U.S. tech stocks.

Price Action: Palantir's shares surged 22.75% in after-hours trading, hitting $102.79. Earlier on Monday, the stock closed at $83.74, reflecting a 1.52% gain, according to Benzinga Pro data.

Check out more of Benzinga’s Consumer Tech coverage by following this link.

Photo by Spyro the Dragon on Shutterstock

Read Next:

• Apple’s iPad Turns 15 Today: Here’s A Throwback To When Steve Jobs Explained Called It The ‘Third Category’ After Phones And Notebooks

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.