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Palantir’s Bet on Big Pharma

January 12, 2017, 8:52 PM UTC

Palantir’s got a new customer, but this one isn’t in the business of covert operations. (Quick reminder: The data analytics company got its start selling to the CIA and other government agencies.) Instead, the latest deal is with Merck KGaA, the German pharmaceutical giant and former parent company of Merck in the U.S.

The latest “partnership,” as Palantir calls its customer deals, was announced at a small press event at the company’s headquarters in Palo Alto, Calif. on Thursday morning. Palantir chief executive Alex Karp was on hand, as was Merck’s CEO, Stefan Oschmann.

“These projects are very much about R&D, and how we discover drugs,” said Oschmann. More specifically, Merck will use Palantir’s analytics software to try to predict which patients will respond best to certain drugs. According to Oschmann, there are also applications in complex supply chain problems—forecasting demand spikes in Latin America, for example.

The two companies have already been involved in a couple of pilot projects, and Karp and Oschmann have been in talks for several years.

“In a way Palantir and our company could not be more different,” said Oschmann. “We also used to be a startup—in 1668.”

Those differences were apparent at Thursday morning’s press event: Karp was uncharacteristically “dressed up” in light jeans and a blue sweater while Oschmann wore a dark, striped suit and tie, complete with a white pocket handkerchief. At the same time, both men say they have found many commonalities, and intend for the deal to last a long time.

“It’s like a dating thing,” said Karp. “At the end of the day, sometimes it works, sometimes it doesn’t. This stuff we’re working on together is seminal to humanity and also seminal to their [Merck’s] business. That takes a bit of time.”

Palantir has been broadening its reach into the commercial sector since 2010. According to Karp, that side of the business has been doubling each year and could end up being as big as its government deals, revenue-wise, this year.

In addition to talking about Palantir’s new customer, Karp also answered some questions about the current political climate and investor Peter Thiel—a Palantir co-founder and early funder who supported Donald Trump during the presidential campaign and is on his transition team.

“Peter and I have been friends for almost 27 years,” said Karp. “Him and I have had a long history of disagreeing on political issues and remaining friends.”

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As for any impact that friendship might have on Palantir’s business, Karp said if there has been any it is that the company is now more known outside of Silicon Valley.