Palantir and Nvidia Join Forces to Tackle This $600 Billion Opportunity
Palantir Technologies and Nvidia have partnered to create comprehensive AI solutions for sovereign AI, a market projected to grow from $150 billion in 2025 to $600 billion by 2030. Their collaboration will provide a complete AI infrastructure, leveraging Nvidia's advanced hardware and Palantir's software suite. Nvidia reported record revenue of $68 billion in its fiscal 2026 fourth quarter, while Palantir's revenue grew 70% year over year to $1.4 billion. Both companies are seen as strong investments in the future of AI.
The accelerating adoption of artificial intelligence (AI) has dominated the tech landscape in recent years. Despite the rapid adoption of the technology, most experts concur that a vast opportunity remains.
One market that's only beginning to emerge is that of sovereign AI. Simply put, this represents each country's individual efforts to develop and maintain control of its own AI, using its own data, computing infrastructure, and employees, ensuring it controls its own AI destiny. While some countries are already in the midst of a robust AI build-out, many have only just begun.
Now, two of the biggest names in AI are joining forces to tackle this massive opportunity.
Image source: The Motley Fool.
In a joint press release that dropped Thursday morning, Palantir Technologies (PLTR +2.24%) announced it has teamed up with Nvidia (NVDA 0.89%) to deliver complete data center AI solutions for sovereign AI. Palantir's AI OS Reference Architecture (AIOS-RA) "delivers a complete, production-ready AI infrastructure."
This framework is based on Nvidia Enterprise Reference Architectures, which have been tested and prequalified to run Palantir's entire software suite, which includes Foundry, Apollo, Rubix, Artificial Intelligence Platform (AIP), and AIP Hub. It will serve as a blueprint for organizations and governments to design, deploy, and scale high-performance AI factories.
It provides customers with a turnkey AI data center solution, from the hardware to the software needed to run AI training and inference. It runs on Nvidia's industry-leading Blackwell Ultra system -- comprised of eight Nvidia Blackwell graphics processing units (GPUs) and Nvidia Spectrum-X Ethernet networking, while leveraging Palantir's Foundry and Apollo data platforms and AIP for the deployment of large language models (LLMs).
NASDAQ: NVDA
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It also leverages Nvidia's full-stack software acceleration, featuring its CUDA programming platform and software architecture, which includes more than 400 software libraries to ensure optimum GPU performance.
What it means for investors
One of the biggest questions investors are pondering these days is whether we've reached peak AI. However, consider this: It's still early days for sovereign AI. The market is expected to grow from roughly $150 billion in 2025 to as much as $600 billion by 2030, according to global management consulting firm McKinsey & Company.
Nvidia has been at the forefront of AI chip development, and continues to reap the rewards. In its fiscal 2026 fourth quarter (ended Jan. 25), the company generated record revenue of $68 billion, up 73% year over year and 20% quarter over quarter. This drove adjusted earnings per share (EPS) of $1.62, which rose 82%.
NASDAQ: PLTR
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For its part, Palantir has been developing AI-centric data mining solutions for more than two decades. The company provides governments and enterprises with AI solutions with real-world applications. In the fourth quarter, Palantir's revenue grew 70% year over year and 19% quarter over quarter to $1.4 billion. This fueled adjusted EPS of $0.25, which surged 79%.
Nvidia stock is the less expensive of the two, trading at 22 times forward sales. Palantir is selling for 117 times forward sales, but that fails to account for the company's accelerating growth rate. Using the more appropriate price/earnings-to-growth (PEG) ratio returns a multiple of 1, which is the standard for an undervalued stock.
For my money, both Palantir and Nvidia represent compelling ways to invest in the future of AI.
