Palantir now owns 8.7% of troubled electric car startup Faraday Future, according to a new filing with the U.S. Securities and Exchange Commission.
The data mining company was granted more than 800,000 shares in the EV startup on October 2 “in payment for certain outstanding claims” – the equivalent of approximately $2.4 million, based on Faraday Future’s share price on that day. Palantir does not explicitly state which claims were outstanding. But the companies quietly reached a settlement earlier this year after the EV startup already stopped paying the data company in 2021 for services it had agreed to buy.
Palantir disclosed the transaction in a so-called 13-G filing, meaning it intends to handle the stake passively, so it’s not likely Palantir will try to seize control of what little business Faraday Future has today . The EV company has only delivered a dozen cars and is constantly in need of new financing.
Instead, Palantir’s bet is a curious outcome of recent years, when so many EV startups quickly flourished and then went bankrupt.
Faraday Future was one of many EV startups that capitalized on the Special Purpose Acquisition Company (SPAC) craze that was happening at the time. It was rewarded for following the crowd: The startup raised $1 billion when it merged with a SPAC and became a publicly traded company.
Palantir played a small role in that process, throwing $25 million into the Private Investment in Public Equity (PIPE) portion of the merger, where the company going public sells shares to outside companies that want to participate. In return, Faraday Future signed a commercial contract with Palantir to use the data mining company’s services. (Palantir was doing a number of these types of transactions at the time — investing in SPAC mergers while signing commercial contracts.) Palantir eventually sold those shares.
Faraday Future said in 2021 that the partnership with Palantir would help the EV startup “develop disruptive products and services.” But the collaboration failed. Palantir sent Faraday Future a letter in April 2023 claiming the EV startup had breached the agreement, according to SEC filings. The data mining company claimed it was owed $12.3 million. In July 2023, Palantir filed a demand for arbitration, claiming that the “disputed amount” was actually $41.5 million.
The two companies reached a settlement in March 2024. Faraday was supposed to pay $5 million, but $4.8 million of that was still outstanding in August, when the companies changed the settlement. Faraday Future then promised to pay Palantir $2.4 million in company stock in August and again in October.
Faraday Future made that first payment in shares before executing a 1-for-40 reverse stock split on August 16, meaning Palantir didn’t initially own that much of the startup. But the second payment came after the split, giving it many more shares and thus an ownership stake of almost 9%.
Neither company immediately responded to a request for comment.
