CITIC SEC has released a research report suggesting that as AI coding becomes more integrated, the creation of a new AI commercialization path is critical. Companies like OpenAI and Anthropic, which have achieved significant success in coding, are now forming Forward-Deployed Engineer (FDE) teams to deeply integrate model capabilities with real-world business scenarios.
The bank believes that software companies, with their client access, delivery capabilities, and industry-specific knowledge, are well-positioned to become key partners for these model firms. This could allow them to capitalize on the value uplift brought by FDE. Drawing on the example of Palantir, the report notes that restructuring business models, building AI engineering delivery capabilities, and exploring outcome-based pricing are key indicators of successful FDE transformation for software companies. CITIC SEC recommends focusing on companies with potential for FDE business development, including: 1) Model providers; 2) Enterprise software firms; 3) IT service providers; and 4) Vertical industry specialists.
Key Insights from CITIC SEC
A major innovation from Palantir, FDE involves deploying engineers directly to client sites to deliver results, with feedback from the field helping to evolve the platform. An FDE bridges the gap between standard products and complex client needs, taking end-to-end responsibility from requirement discovery to production deployment. Unlike pre-sales engineers who focus on closing deals or traditional outsourced developers who fulfill contracted tasks, FDEs solve core business problems and are accountable for final outcomes. Palantir has achieved high profitability and client retention through this model, using an Echo-Delta collaboration mechanism. After moving into commercial sectors in 2016, Palantir's FDE entered a new phase in 2023, focusing on AI agents and automated decision-making, with AI assisting in reducing delivery costs. This has led to record-high margins, including a 2026 Q2 adjusted gross margin of 86%.
Leading model companies are now forming FDE teams and expanding their partner networks. In May 2026, OpenAI established a subsidiary called OpenAI Deployment Company, securing $4 billion in funding and acquiring around 150 FDE experts from Tomoro. Anthropic has also formed a joint venture with Blackstone and Goldman Sachs, securing $1.5 billion in investment commitments, and is partnering with global consultancies to expand its FDE reach. CITIC SEC suggests that as model companies build FDE teams, the roles of software and consulting firms will become more prominent due to resource allocation issues.
Software companies are poised to become key partners for deploying model capabilities, potentially experiencing a significant value increase. With enterprises struggling to effectively use AI, demand for FDE is expected to surge. Gartner predicts that by the end of 2026, over 85% of tech service providers will use FDE projects as a core method for delivering AI and reducing deployment cycles. CITIC SEC identifies key advantages for software companies in developing FDE: client access to AI scenarios, established on-site management systems, and deep industry knowledge. However, FDE also demands that software companies build a cycle from on-site customization to product abstraction and scalable reuse, develop AI engineering capabilities, and transition from per-day to outcome-based billing. Firms with strong client bases and the ability to quickly establish FDE models could see a significant commercial value uplift.
Risks: Model technology innovation may fall short of expectations; FDE business model development and application scenario expansion may not meet forecasts; AI commercialization may be slower than anticipated; and industry competition could intensify.
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