By Palantir now owns 8.7% of struggling electric vehicle 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 “as payment for certain outstanding receivables” — the equivalent of roughly $2.4 million judging by Faraday Future’s stock price on that day. Palantir doesn’t explicitly say what receivables were outstanding. But the companies quietly entered a settlement earlier this year after the EV startup stopped paying the data company for services it agreed to buy all the way back in 2021.
Palantir revealed the transaction in what’s known as a 13-G filing, meaning it intends to treat the stake passively, so it’s not likely that Palantir will try to hold sway over what little business Faraday Future has these days. The EV company has only delivered around a dozen cars and is constantly in need of new funding.
Instead, Palantir’s stake is a sort of peculiar outcome of the last few years, where so many EV startups rapidly went boom and then bust.
Faraday Future was one of many EV startups that hopped on the special purpose acquisition company (SPAC) craze 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 public company.
Palantir played a small part 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 looking to join the ride. In exchange, Faraday Future signed a commercial contract with Palantir to use the data-mining company’s services. (Palantir did a number of these kinds of transactions — investing in SPAC mergers and simultaneously signing commercial contracts — at the time.) Palantir ultimately sold those shares.
Faraday Future said in 2021 that its partnership with Palantir would help the EV startup “develop disruptive products and services.” But the partnership broke down. Palantir sent Faraday Future a letter in April 2023 alleging 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 the “amount in controversy” 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 amended the settlement. Faraday Future then pledged to pay Palantir $2.4 million worth of company stock in August and again in October.
Faraday Future made that first payment in stock before it performed a 1-for-40 reverse stock split on August 16, meaning Palantir initially didn’t own all that much of the startup. But the second payment came after the split, giving it far more shares and, therefore, a nearly 9% ownership stake.
Neither company immediately responded to a request for comment.
