there’s a 20% to 30% risk of a nuclear war

The world is underestimating the risk of Russia-Ukraine conflict turning into a nuclear war, says the Chief Executive Officer of Palantir Technologies Inc (NYSE: PLTR).

Highlights from CEO Karp’s interview on CNBC

Alex Karp sees a 30% risk that the ongoing geopolitical tensions in Eastern Europe will eventually spark a nuclear war. Speaking with CNBC’s Andrew Ross Sorkin this morning, he said:

Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

I think most people think the risk is below 1.0%. Of course, it depends on the duration. So, if you have a long duration, I think the risk can be modelled, and it’s probably in the range of 20% to 30%.

The war is already stepping into its fourth month and has, so far, resulted in close to 4,000 casualties in Ukraine. Kyiv is projected to see a 45% decline in its economy this year.

Why is the risk of a nuclear war being underestimated?

Last month, Putin warned the U.S. and its allies will face “unpredictable consequences” if it continues to supply weapons and incite Ukraine to attack Russia. Explaining the reason that risk of a nuclear war is being underestimated, CEO Karp added:

We underestimate the risk because we’ve had, since World War II, a system that’s functioned – and people believe that system will override and it’ll be rational. But now the system could actually flip. There are just moments of completely irrationality.

The Ukraine war is keeping oil prices well above $100 a barrel this year, adding to the global inflationary pressures and supply constraints. Palantir stock is down roughly 60% for the year at present.