Alex Karp just told CNBC the AI industry is “effing insane.”

He’s right about one thing: AI isn’t overhyped, it’s mispriced. He’s also the guy selling you the fix. Diagnosis: correct. Prescription: his invoice.

Alex Karp goes on TV and does not do small talk. In a recent interview about the Palantir-Nvidia deal, he skipped past pleasantries and went straight to a claim: the enterprises running critical infrastructure in this country don’t trust OpenAI or Anthropic anymore. Not a little. A lot. He described a “level of discomfort and loss of trust” among his clients toward the frontier labs.

Here’s the thing. He’s not wrong about the problem. He’s just also the guy who sells the solution.

The counterintuitive idea: everyone’s been debating whether AI is overhyped. Karp is making a sharper claim: it’s not overhyped, it’s mispriced, and the mispricing is a trust problem, not a capability problem.

Walk through his logic. An enterprise (a defense contractor, a hospital system, a manufacturer) plugs a large language model into its operations. That model provider now sees the company’s data, its workflows, the thing that makes the business valuable. Karp’s word for it is “alpha,” the trading-desk term for your actual edge. His question: “why would they get access to my data if they’re going to build my alpha?” Enterprises are paying per token, he says, for a service that might be quietly training the next model on the exact playbook they’re renting the model to run.

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