Palantir Is Winning Big With Corporate AI. Can the Spending Boom Last?

For years, software companies have promised that AI would transform how businesses operate. Palantir'sPLTR latest earnings suggest that promise is finally paying off, with corporate customers spending more than ever. But there's a catch. Most American businesses are still experimenting with AI, and the companies making serious investments remain a surprisingly small group.

Corporate customers take the lead

Palantir Technologies reported another blockbuster quarter, with US commercial revenue jumping 148% to $984M. That surpassed its government business for the first time, as US government revenue grew 96% to $953M.

The shift marks an important milestone for a company long associated with defense and intelligence contracts. Corporate customers are now becoming its biggest growth engine, helping push total quarterly revenue up 96% to $2.31B.

And customers aren't just signing up for smaller projects. Palantir closed 212 deals worth at least $1M during the quarter, including 64 valued at $10M or more. Its remaining US commercial deal value climbed 79% to $6.52B, giving the company a substantial pipeline of contracted business.

With demand showing little sign of slowing, management raised its full-year revenue forecast to approximately $8.53B.

Most businesses haven't caught up

Palantir's numbers paint a picture of booming corporate demand. But across the broader economy, AI adoption is moving at a much slower pace.

Just 24.6% of US employer businesses reported using AI during the two weeks ending Oct. 18, according to Census Bureau data. Adoption was considerably higher among businesses with at least 250 employees, at 43.6%.

The differences across industries were just as striking. Nearly half of information-sector businesses reported using AI, compared with only 18.5% of retailers.

Even those numbers don't tell the whole story. The survey measures whether a business used AI at all, meaning a company using ChatGPT to draft emails counts alongside one deploying AI throughout its operations.

In other words, using AI and investing heavily in it are two very different things.

Turning experiments into profits

The bigger challenge is getting AI beyond the testing stage. Nearly 60% of organizations surveyed by Citi Institute remain in exploration or pilot phases, while roughly 40% have moved into production or scaling.

North America is further ahead, with 77% of surveyed organizations reaching those later stages. Among companies already deploying AI at scale, 60% reported value creation exceeding 15% through higher revenue, lower costs, or productivity gains.

Still, meaningful transformation remains rare. A separate MIT Technology Review Insights survey found that only 16% of enterprises are seeing transformative value from AI, while just 12% have AI agents operating in production.

One major obstacle is getting AI systems to understand how individual businesses actually work. Without access to the right internal data and processes, even sophisticated models can struggle to deliver useful results.

The payoff is taking longer

Businesses are beginning to see improvements, although those gains aren't always showing up in their financial results.

In a Deloitte survey of 3,500 leaders across 25 countries, 81% said AI helped them make decisions faster. Yet only 25% reported using the technology to fundamentally transform their businesses.

Revenue improvements are becoming more common, with 28% of companies reporting gains, up from 20% in January. But tracking the costs remains a problem. While 71% monitor overall inference and interface spending, only 44% measure inference costs per unit.

That makes it harder to determine whether the productivity improvements are actually worth the investment.

What investors should watch

Palantir's results show that businesses are willing to spend heavily on AI when they see a clear use for it. Its growing commercial pipeline also suggests that some customers are moving well beyond experimentation.

But the wider market tells a different story. Roughly three-quarters of US employer businesses weren't using AI during the Census Bureau's latest survey period, while many existing users have yet to move beyond pilot projects.

For investors, that creates both an opportunity and a risk. Companies like Palantir are benefiting from large corporate contracts today, but sustaining that growth will depend on expanding adoption and convincing more customers that AI can deliver measurable returns. Those deals also need to translate into durable profits at valuations that leave room for investors to benefit.

The next stage of the AI boom won't be decided by how many businesses try the technology. It'll depend on how many find it valuable enough to keep paying for it.