Palantir Secures 8.7% Stake in Faraday Future

Palantir Technologies now owns 8.7% of the struggling electric vehicle (EV) startup Faraday Future, according to a recent filing with the U.S. Securities and Exchange Commission (SEC). This stake, valued at approximately $2.4 million, was granted to Palantir on October 2, 2024, in the form of over 800,000 shares. The payment was made to settle outstanding receivables, although the exact nature of the receivables has not been disclosed.

Settlement for Unpaid Services

Faraday Future’s payment to Palantir resolves a dispute that began in 2021 when the EV startup stopped paying for services it had previously agreed to buy. The companies reached a settlement earlier in 2024 after Palantir filed a demand for arbitration, claiming Faraday owed $41.5 million. As part of the settlement, Faraday pledged to pay Palantir $5 million, with the majority of this amount being settled through company stock.

Passive Investment in a Struggling EV Startup

Palantir revealed the transaction in a 13-G filing, which indicates that it plans to hold the stake passively without seeking control over Faraday Future’s business operations. Faraday Future, once a promising EV startup, has faced numerous financial challenges and has only delivered a limited number of vehicles. The company continues to seek new funding to stay afloat.

The Rise and Fall of Faraday Future

Faraday Future was one of several EV startups that rode the special purpose acquisition company (SPAC) wave, raising $1 billion when it merged with a SPAC and became a public company. Palantir had previously invested $25 million in the Private Investment in Public Equity (PIPE) portion of the merger, and in return, Faraday Future signed a commercial contract with Palantir to use its data-mining services. However, the partnership fell apart, leading to the current settlement.

Faraday’s Stock Payments and Reverse Split

Faraday Future initially paid Palantir in stock before performing a 1-for-40 reverse stock split on August 16, 2024. The second payment, which came after the stock split, significantly increased Palantir’s share ownership to nearly 9%.

Future Uncertain for Faraday and Palantir

Both Palantir and Faraday Future have remained silent on the latest developments. While Palantir has no intention of taking an active role in Faraday’s operations, the situation reflects the broader challenges faced by many EV startups that rose quickly during the SPAC boom and are now struggling to survive.