Results

Arm Q2 licensing, royalties shine due to complex AI chips

Arm said more complex AI chips are driving license revenue as its second quarter was better-than-expected with and in-line third quarter outlook.

For the third quarter Arm said it expects non-GAAP earnings between 32 cents a share and 36 cents a share with revenue between $920 million to $970 million. Wall Street was expecting third quarter non-GAAP earnings of 34 cents a share on revenue of $951 million.

Arm reported fiscal second quarter earnings of $107 million, or 10 cents a share, on revenue of $844 million, up 5% from a year ago. Non-GAAP earnings were 30 cents a share. Analysts were expecting earnings of 26 cents a share on revenue of $810.9 million.

Arm CEO Rene Haas said:

"Demand for our high-performance Armv9 and CSS compute platforms continues to exceed expectations, and to accelerate our licensing and royalty revenue growth. AI everywhere is generating new opportunities for the Arm compute platform from the cloud to the edge."

In a shareholder letter, Arm executives said the company is benefiting from "AI everything" and the need for more energy-efficient chips.

"Demand for Compute Subsystems (CSS) has been higher than expected and is also contributing to licensing growth. Our royalty revenue growth has also been very positive. Royalty revenue is benefiting from higher revenue per device as more customers deploy our latest high performance Armv9 to address AI demand and as our CSS royalty revenue ramps. The cumulative number of chips shipped by the Arm ecosystem has now exceeded 300 billion."

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Qualcomm Q4 shines, ups outlook for Q1

Qualcomm delivered fourth quarter revenue growth of 19% as it saw strength across its smartphone, auto and Internet of things units.

The company reported fourth quarter earnings of $2.92 billion, or $2.59 a share, on revenue of $10.24 billion, up 19% from a year ago. Non-GAAP earnings were $2.69 a share.

Wall Street analysts were expecting Qualcomm to report fourth quarter non-GAAP earnings of $2.57 a share on revenue of $9.93 billion.

For 2024, Qualcomm reported earnings of $10.14 billion, or $8.97 a share, on revenue of $38.96 billion, up 9% from fiscal 2023.

CEO Cristiano Amon said the company's product cadence is strong and positions us well across handsets, PC, automotive and industrial IoT." The company will outline plans to diversify its business on November 19. On a conference call, Amon said:

"As the strong pace of AI innovation continues, there is now broad recognition of the opportunity for on-device AI to enable new capabilities and transform the human-computer interface. On-device AI provides context, enhances immediacy and reliability, and enables personalization while providing privacy and security. Additionally, GenAI-enabled devices and applications are evolving to understand natural language, images, sound, and the world around us, driving a new generation of AI-first experiences. This has the potential to create a new cycle of semiconductor innovation and content, and Qualcomm is well-positioned to capitalize on this opportunity across devices at the edge."

Qualcomm has moved to expand into AI PCs as well as automotive and IoT. Ultimately, Qualcomm is expected to expand in the AI server processor market as well as edge computing.

Constellation Research analyst Holger Mueller said:

"Qualcomm had a very strong Q4 with all revenue lines growing, The growth in automotive is particularly encouraging, a market that has been traditionally slower for Qualcomm, but showed 68% growth. Qualcomm almost doubled its EPS. Cristiano Amon and team remain optimistic with an realistic but optimistic growth for the next fiscal year. All eyes will be on the performance and uptake of the new Snapdragon Elite platform."

Handsets fourth quarter revenue was $6.10 billion, up 12% from a year ago. Automotive fourth quarter revenue was $899 million, up 68% from a year ago. IoT revenue in the quarter was $1.68 billion, up 22%.

Qualcomm also said it will spend $15 billion to buy back stock.

As for the outlook, Qualcomm is projecting first quarter revenue of $10.5 billion to $11.3 billion with non-GAAP earnings of $2.85 a share to $3.05 a share.

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Leadership Shifts, GenAI in Software Development, #CCE2024 Recaps | Episode 92

In ConstellationTV episode 92, co-hosts Liz Miller and Holger Mueller tune in independently to discuss the latest #enterprise news. They cover #earnings of major #technology companies and recent leadership changes, including retirement and succession plans of several CEOs.

Next, Larry Dignan interviews Erik Severinghaus, co-CEO of Bloomfilter, about the company's #software development efficiency and the role of #generativeAI in analyzing pull requests and ensuring compliance.

Round out the episode w/ daily recaps from our analysts of last week's executive summit, #CCE2024. They highlight main speakers, key takeaways and future trends.

00:00 - Meet the Hosts
01:33 - Enterprise tech news updates
11:19 - BT150 Spotlight Interview: Bloomfilter
19:22 - Daily Recaps from #CCE2024
29:36 - Bloopers!

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CrowdStrike buys Adaptive Security

CrowdStrike said it will acquire Adaptive Shield, a company focused on software-as-a-service security. The company said Adaptive Shield will be integrated into its Falcon platform.

Terms of the deal weren't disclosed, but CrowdStrike noted it was an all-cash purchase.

CrowdStrike said the purchase will enable it to defend against identity-based attacks from on-premises Active Directory to cloud identity systems and SaaS.

The deal lands as CrowdStrike digs out from a high-profile outage and is being sued by Delta.

George Kurtz, CEO of CrowdStrike, said: "As SaaS and AI adoption grows, every new application brings additional complexity and the risk of misconfigurations across human and non-human accounts that create openings for sophisticated attacks."

Adaptive Shield brings the following to CrowdStrike:

  • SaaS Security Posture Management (SSPM) to provide visibility to misconfigurations and activity from human and non-human identities.
  • Generative AI application security controls via Adaptive Shield's ability to control AI settings and find shadow AI applications.
  • Hybrid identity and cloud security. The companies will combine Adaptive Shield with CrowdStrike Falcon Identity Protection and Falcon Cloud Security in one console and workflow.

Adaptive Shield is already integrated with CrowdStrike's Falcon Next-Gen SIEM.

 

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Supermicro cuts Q2 outlook amid ongoing audit issues, delayed annual report

Are you going to buy your AI servers from a company that can't file an annual report and just had its auditor quit? That's the question enterprises and hyperscale cloud providers are asking after Supermicro's preliminary first quarter results.

Supermicro said that it reported in the first quarter it will report sales in the range of $5.9 billion to $6 billion, down from its previous range of $6 billion to $7 billion.

Earnings for the first quarter will be between 68 cents a share to 70 cents a share. Non-GAAP first quarter earnings were 75 cents a share to 76 cents a share. Supermicro's previous range for non-GAAP earnings of 67 cents a share to 83 cents a share.

Supermicro said its total cash and cash equivalents are $2.1 billion with debt of about $2.3 billion.

Those results come after the company has delayed its annual report and is in danger of being delisted. On Oct. 24, Ernst & Young notified Supermicro that it had resigned as the company's auditor.

As for the guidance Supermicro said sales will be between $5.5 billion to $6.1 billion in the second quarter with non-GAAP earnings of 56 cents a share to 65 cents a share. Wall Street was looking for sales of $6.79 billion with non-GAAP earnings between 80 cents a share.

Supermicro also updated investor on the concerns that made Ernst & Young resign. The Audit Committee said:

"The Special Committee has completed its investigation based on a set of initial concerns raised by EY. Following a three-month investigation led by Independent Counsel, the Committee’s investigation to date has found that the Audit Committee has acted independently and that there is no evidence of fraud or misconduct on the part of management or the Board of Directors. The Committee is recommending a series of remedial measures for the Company to strengthen its internal governance and oversight functions, and the Committee expects to deliver the full report on the completed work this week or next. The Special Committee has other work that is ongoing but expects it to be completed soon."

What remains to be seen is how this ongoing issue affects Supermicro sales. Supermicro is a key AI system provider. Dell Technologies, HPE and others are likely to benefit.

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HOT TAKE: Openprise further enables strategic "GrowthOps" with new agentic AI toolset

Openprise has added a significant amount of agentic AI tools to its main offering, the Openprise RevOps Data Automation (RDA) Cloud The new tools allow users to create new AI-powered data management and automation solutions, without limitations from IT, in a secure and compliant environment. The new toolset is called the Openprise AI-agent Factory

Given the high need for strong security and AI guardrails around d building agentic solutions for workflows that touch such critical customer and revenue data, it makes sense for vendors to offer embedded tools inside already secure revenue management platforms. Also, providing these new tools in a no-code, easy to use interface allows business users, such as RevOps teams and marketing ops, etc. to create AI agents without a lot of IT involvement. 

The key tenets of the Openprise AI-agent Factory: 

Secure and compliant by default: With RDA Cloud’s data automation platform, customers can use Openprise’s embedded models that are pre-designed for data quality use cases or any model with OpenAI-compatible APIs, such as OpenAI, Anthropic, Cohere, Groq, and custom internal models. The company claims data never leaves the RDA Cloud and Openprise never uses customer data for training models.

Embedded AI: The Agent Factory toolset is meant to allow seamless, no-code deployment of agentic AI use cases, which will not necessarily require IT resources, rather business users will be able to create new AI agents with no code right inside the RDA Cloud. 

Turnkey: The RDA Cloud is designed to be a complete end-to-end data automation platform featuring integrated AI solutions for RevOps teams with built-in data access model deployment, hosting, governance, and automation. Openprise says the RDA Cloud handles everything from data prep and integrations to automation and deployment. Just log in and build your AI solutions without the need for specialized tools or technologies, no coding or help from IT required.

The company has been keen to clarify that this is not a “bolt on” set of copilots but rather a truly embedded tool set to create automations that bring data and workflow together to drive productivity and improved growth strategies. Openprise CEO Ed King said in a statement: “AI has the potential to be the most powerful tool RevOps professionals can build with. Our announcement today is not about adding another AI co-pilot to your tech stack. Openprise is delivering the essential tools to create customized, AI-driven solutions, making it simple for RevOps to build with AI.”

For existing users of Openprise, this can unlock significant productivity gains, and streamline key revenue processes as well as enable RevOps teams to make more strategic decisions more quickly. And as RevOps teams of all types make the shift to a more “growthOps” focus (meaning: incorporating more data and owning more processes that contribute to revenue along the entire customer lifecycle and not just acting as a “deal desk” for sales), these AI tools coupled with Openprise’s strong data and process oriented platform can act as a springboard from tactical RevOps to more strategic GrowthOps. 

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Leveraging Process Mining and GenAI to Optimize Software Development | BT150 Spotlight

In the following BT150 Spotlight interview, Larry Dignan sits down with Eric Severinghaus, Co-CEO of Bloomfilter, to discuss how the company is leveraging process mining and #generativeAI to help customers optimize their software development practices.

Bloomfilter connects to the tools software teams already use to gather data on the software development lifecycle. They use process mining to identify areas of waste, rework, and compliance issues causing delays, security vulnerabilities, and production outages.

This conversation explores how Bloomfilter integrates genAI to analyze code changes, ensure requirements, and prioritize high-risk tasks needing additional testing and oversight. This helps orgs govern the increasing use of AI-driven software development and extract more business value from their processes. The discussion covers Bloomfilter's partnership strategy, predictions for the evolution of software development in 2025, and the key stakeholders driving the adoption of these process optimization solutions.

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Bloomfilter co-CEO Severinghaus on the intersection of process mining, software development


Bloomfilter is looking to meld process mining and process intelligence with software development via a partnership with Celonis. The goal: make developing applications at scale more efficient.

The company will power the Celonis Software Development Lifecycle Management (SDLC) application. Celonis for SDLC powered by Bloomfilter will align business priorities with technology initiatives, measure financial impact of resources and map and analyze processes and recommend ways to be more efficient.

At Constellation Research's Connected Enterprise, I caught up with Erik Severinghaus, Co-founder and Co-CEO of Bloomfilter, to talk shop. Here are some of the takeaways.

The intersection of software development and process mining. Severinghaus said the combination of software development and process mining is designed to build software that is "more efficient, more predictable, more observable and more nimble."

While software development is scaling with generative AI code, enterprises need to focus on the underlying processes. Bloomfilter, which is built on the Celonis platform, pulls in data from tools including Atlassian's Jira, GitHub from Microsoft and GitLab to show how software development is being done.

Severinghaus said:

"We pull all the information about how the software development process is working, and then we use process mining technology to help a customer understand, where there's waste, inefficiency, rework and steps that are skipped or not in compliance with the company's process. These issues could lead to production outages and security vulnerabilities."

What process mining reveals. Process mining typically has a few surprises for enterprises and the biggest one in software development tends to be rework. "You connect to these systems and pull out the way the process moves and we find things like 40% to 45% of tasks require rework," said Severinghaus. "When you look at the business impact of all of that rework, it becomes really apparent why 78% of software is late, over budget or doesn't ship at all."

Bloomfilter monitors software development processes, software process adherence, allocation of costs and the value being generated.

Why process matters with generative AI. "Enterprises are increasingly using automated code systems and there are a lot of interesting places where process interacts with AI," said Severinghaus. "First we couldn't do this without AI, but when you think about the software development life cycle there are about 15 different tools being stitched together. Customers are using AI to build software and there's been less and less governance."

Severinghaus said process mining is a way to analyze software development and pull out what's important. One of the most important things to do is to assess risk. "We are using generative AI to stitch the process together to govern what's happening in an AI-driven SDLC," he said.

The C-level buyer. Severinghaus said the buyer of Bloomfilter varies since every company is a software company today. For software companies, the primary buyer of Bloomfilter is the CTO or chief product officer. In more mainline companies, CIOs tend to be the main buyers with the CFO and COO playing a big role. "They want observability and they want to see what's happening within this black box of software development translated into words they can understand," said Severinghaus.

What's next? Bloomfilter's partnership with Celonis gives it the ability to plug into more systems including Salesforce and ServiceNow to deliver process intelligence for SDLC. Severinghaus said governance will also become vital as AI agents are including in the software development process. "If 2024 was the year of throwing AI against the wall and see what use case sticks, 2025 is very much going to be the year of how we govern and get business value out of it," said Severinghaus.

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Who’s Afraid of Little Ole AI: Some Post Adobe MAX Thoughts

“Writing should be respected and held to be nobler than all goods, unless she has suffered degradation in the brothel of the printing presses. She is a maiden with a pen, a harlot in print. Governed only by avaricious gain, will not that most base woman deserve the name of prostitute?”

In 1440 when the Gutenberg printing press was introduced, not everyone was a fan. Take Filippo de Strata (quoted above) who wrote an entire polemic tome to urge Italian nobility to banish the printing press to the fire heap. I mean, the guy outright called the machine a prostitute!

It is not unheard of that new technologies are met with a blend of excitement and fear.

Radio: “Radio is a highly complicated machine in the hands of people who know nothing about it.” Thomas Edison

The Internet: “The truth is no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works” Clifford Stoll, Newsweek Magazine

Now, let’s do Artificial Intelligence (AI): â€œIt will mean that 95% of what marketers use agencies, strategists, and creative professionals for today will easily, nearly instantly and at almost no cost be handled by the AI.” Sam Altman

There is a rightful discussion and welcome debate over where and how AI, and perhaps more specifically Generative AI (GenAI) can or should be unleashed…and where it should or must be constrained and restricted. In fairness, even Sam Altman, CEO of OpenAI, clarified his above quote by noting that GenAI and AI as a larger entity would reframe human creativity, not replace it. Since GenAI tools exploded onto the scene, there has been a blend of curious enthusiasm and cautious skepticism with a side of fear mongering as pundits wonder aloud just how many hard-working humans will lose their livelihoods in this rise of the machines.

After spending a week in Miami surrounded by artists, creatives and creators, I am happy to report that AI adoption and use has evolved beyond those early days of fear and misunderstanding. I would argue that artists and creators have embraced the debate and the tools, choosing to be active participants by contributing to the guardrails that protect intellectual and creative property while also unleashing their own wild human creativity in new and extraordinary ways. The electricity that ran through the Miami Beach Convention Center at Adobe MAX 2024 was more about what artists could do next in this age of AI as art and art with AI. If the machines rise, the consensus in Miami was that the artists and creators of the world were going to rise right along with them.

Some Standout Announcements

  • Adobe Firefly Video Model is here and its gonna be a whole big thing. In beta, this newest member of the Firefly model family generates video from text and image prompts. It can smooth out transitions and even extend video clips. It also doesn’t hurt to have deep integrations with Premiere Pro so that video generation to editing and use is a smooth process. Generative Extend is a prime example, now available in beta in Premiere Pro. It extends video clips to cover gaps in footage and can even hold on a shot longer to enable perfect timing on pesky edits.

    Keeping pace with video creation requests feels impossible for most marketing and creative teams. Video can be expensive, time consuming and operationally impossible to move along efficiently. But this is interestingly where Adobe seems to be focusing…at that key content supply chain bottle neck that can fester and disrupt the flow between creative ideation and content generation.

    The introduction of the Firefly Video model is on its own an impressive announcement, but couple it with a brand new Frame.io and new device partnerships between Frame.io and the likes of Canon, Nikon and Leica to the Camera to Cloud ecosystem, video production as we know it is about to have a whole massive shakeup that makes video far more accessible, affordable and usable for marketing but easily extends to informal engagement hubs like HR, Sales and Service.
     
  • The Adobe Firefly Image Models also keep improving with the introduction of Firefly Image Model 3 that doesn’t just look at generating more content aware and realistic images…it does it four times faster. That’s right…now you can generate in FAST MODE. And yes, every time I see the button to activate these faster generations, I can’t help but shout “FAST MOOOOOODE!!!!” with my hands cupped like a bullhorn.

    A snappier model joins enhancements and improvements to Adobe’s Firefly Services and Custom Models for enterprise customers, making it is easy to see why enterprises are leaning into generating with Firefly for speed and for brand safety. With the focus on commercial readiness, these continuously improving models aren’t just focused on how good a generation can look…it also ensures that when you ask for an image of a woman drinking a soda, that the soda label isn’t a CocaPepsi or some other brand-infringing gaffe. Plus, with Custom Models, organizations can amplify safeguards by training the model on brand approved style guides and asset portfolios brining a new level of specificity to the generated assets.
     
  • Adobe brought an impressive upgrade to the GenStudio line with GenStudio for Performance Marketing. GenStudio is the end-to-end set of Creative Cloud and Experience Cloud applications together. GenStudio for Performance Marketing is a self-service, GenAI forward solution designed to optimize content for specific performance driven initiatives. This connects the dots between creation and campaign deployment across paid campaigns or even marketing driven emails. Soon every resource involved in this content supply chain can activate campaigns and make real time, in-flight adjustments on everything from creative assets to deployment parameters in channels like paid social and even mobile. Imagine saying goodbye to that social ad campaign postmortem where the image or the video clip was to blame for poor performance…instead imagine a GenAI empowered process that can meet market and consumer demand for fresh content while also satisfying the business’ demand for optimized spend and performance.
     
  • Project Concept just speaks to my marketing and agency exec soul. If tools like GenStudio are focused on the gaps in the launch and optimization stages of the content supply chain, tools like Project Concept rewind the tape BEFORE the very beginning and gives a collaborative home to the very initial stages of creativity, concepting and testing. Mood boards aren’t just for teenagers manifesting their perfect prom-posal. I often relied on crude mood boards cobbled together on PowerPoint slides to bring a visual center point to campaign and project concepts.

    A good mood board can encapsulate the look AND actual feeling intended to be shared with a campaign’s audience. A GREAT mood board sticks in your memory not just for the campaign it spawned, but for the creativity NOT used yet. Exceptional mood boards are durable…home to a collection of images, attempted glyphs for logos and even early-stage illustrations that should be revisited. Mood boards are home to everything from colors and textures to styles and fonts. Creativity is not easy. But having tools that collect and bring order to artistic chaos can make the creative process a little bit easier. Project Concept is in its own earliest stages of iteration, just entering private beta, but expect to see this highly collaborative space for creativity to be ready for ideation soon.

Even with ALL that, it was a single tool…a single new feature…that earned the MAX live audience’s biggest, boldest, most unbridled cheer: Distraction Removal. Described as a “smart technology to help remove people, wires, poles and other distractions from images” it was the star of the show. It once again proves that for users, AI’s most potent magic is in the simple, usable and immediately valuable details.

Some Parting Thoughts

It is hard to walk away from Adobe MAX without a sense of awe at what creatives, artists and every day creators can dream up and express. While the tools and the announcements were impressive and signaled a significant commitment to an AI-powered roadmap that will continue to push Adobe and the experience market forward, the tools always pale in comparison to the people and the community on display.

AI is neither the prostitute printing press nor the creative job killer. It, like every innovative tool and instrument before it, is as powerful as the minds and the hearts of those who wield it. How you use it and how you fill it still requires that you make the first thought, the first idea…the first prompt. How the rest unfolds is up to you. Throughout the week, I had the chance to connect with creators who were all more than willing to share their creations, showing off art tucked into sketch books or stored on laptops and phones. This community is doing what it has done since the very first time artists got together in a town square: they share, they celebrate and then...they roll up their sleeves. What they will create next will only be limited by their imagination and not dictated by any technology or tool. And thanks to new AI tools that extend creative capabilities into more informal creative and engagement hubs, the community will get larger and welcome even more more creators. 

 

 

 

 

 

 

 

 

 

 

 

For a more comprehensive list of announcements, read here.

There is also a MAX blog that highlights some of the announcements I’ve listed above, read here.

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Palantir Q3 strong amid strong AI demand; Karp says 'we intend to take the entire market'

Palantir delivered strong third quarter results and upped its outlook for the fourth quarter. CEO Alex Karp said the quarter "was driven by unrelenting AI demand that won't slow down."

The company reported third quarter earnings of $144 million, or 6 cents a share, on revenue of $726 million, up 30% from a year ago. Non-GAAP earnings were 10 cents a share in the quarter.

Wall Street was expecting Palantir to report non-GAAP third quarter earnings of 9 cents a share on revenue of $703.7 million.

Palantir is delivering strong growth as its US commercial revenue accelerates along with its US government sales. Palantir has landed enterprise customers with its AI Platform Boot Camps

As for the outlook, Palantir projected revenue of $767 million to $771 million. For 2024, Palantir projected $2.805 billion to $2.809 billion. The company expects a US commercial revenue of $687 million, up 50% from a year ago, and GAAP operating and net income in each quarter of the year.

Palantir closed 104 deals above $1 million in the third quarter as customer accounts surged 39% from a year ago. Lowe's bets on AI, technology to navigate slowing demand

The company's growth rate has accelerated in the last six quarters.

In a shareholder letter, Karp said the following:

  • "The growth of our business is accelerating, and our financial performance is exceeding expectations as we meet an unwavering demand for the most advanced artificial intelligence technologies from our U.S. government and commercial customers."
  • "A juggernaut is emerging. This is the software century, and we intend to take the entire market."
  • "The unrelenting march of our business has been driven by an early and decades-long investment in the technical infrastructure that is now making the large language models that have reshaped our world useful and valuable to large enterprises."
  • "It is the speed with which institutions in the United States, in particular, have adopted our platforms and artificial intelligence capabilities more broadly that has been, and we believe will continue to be, the driver of our growth. As America once again forges ahead, our allies and partners in Europe are being left behind. Their private and state institutions stand on the sidelines during this pivotal moment in economic history, while the relentless innovation of U.S. companies disrupts and reshapes global industries. Europe must adapt to the opportunities and challenges of AI, or risk ruin."

On a conference call, Palantir executives made the following points:

  • "We're witnessing the commoditization of cognition with the rapid advancement of AI models," said Ryan Taylor, Chief Revenue Officer.  "Almost all investment in the AI space has been focused on supplying and improving these models. What would differentiate the AI haves from the have needs is the ability to maximally leverage these models by capitalizing upon the rich context within the enterprise."
  • Taylor said Department of Defense drove seqentual revenue growth.  
  • Shyam Sankar, CTO, said: "Models continue to improve, but more importantly, the models across both open and closed source are becoming more similar. They are converging, all while pricing for inference is dropping like a rock. This only strengthens our conviction the value is in the application and workflow layer, which is where we excel."
  • The big LLM companies will have to build applications around their models to extract value, said Sankar. The differentiation for Palantir is ontology across AIP.  
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