Rackspace Technology wants to be the operating layer for enterprise AI in places where data cannot leave the building.
Rackspace (NASDAQ: RXT) is a hybrid and multicloud services company. On July 9 it launched an operating framework with Palantir Technologies aimed at regulated and sovereign enterprises that need to run AI in production while keeping control of data, security, governance and deployment location. The framework pairs Palantir's Foundry and AIP software with Rackspace's governed private cloud, sovereign cloud and on-premises infrastructure, backed by roughly 400 Palantir certifications across Rackspace. The companies say their first joint deployment, at a U.S. solar-tracking manufacturer, closed in under two months and cut quote cycle time by 94%.
The same day, Rackspace outlined plans to ramp its Enterprise AI business to 15 megawatts of cumulative capacity by the end of 2027 and 30 megawatts by the end of 2028, and guided preliminary second-quarter revenue of $641 million to $649 million. The company also cut its full-year 2026 revenue outlook by $150 million, a reminder that the legacy cloud business is shrinking even as the AI pivot accelerates. This is market commentary, not investment advice — small-cap technology stocks are highly speculative and you can lose your entire investment.