UK signs £1.5bn defence AI partnership with Palantir

Deal expected to create over 300 tech jobs

The Ministry of Defence (MoD) has signed a strategic partnership with US data analytics company Palantir, in a deal that could see up to £1.5 billion invested in the UK over the coming years.

Announced by Defence Secretary John Healey, the agreement will see Palantir establish London as its European defence headquarters and create up to 350 high-skilled jobs in the UK.

The partnership will focus on developing AI-powered capabilities for the British Armed Forces, including decision support, military planning and targeting systems. Some of these technologies are already being trialed on the battlefield in Ukraine, where AI tools are used to speed up intelligence analysis and operational planning.

Healey said the deal represented “a major vote of confidence in UK leadership in defence, data and AI technology,” adding that AI will play a key role in equipping the armed forces to respond to evolving threats.

The MoD said the arrangement could generate contracts worth up to £750 million over the next five years and is intended to strengthen the UK’s position as a defence innovation hub within NATO. It will also involve Palantir supporting British defence SMEs, including mentoring start-ups and helping them expand into US markets.

Palantir CEO Alex Karp described the UK as the company’s “largest presence outside of the US,” and said the partnership would reinforce Britain’s role as “a major military force protecting the West from our adversaries.”

Palantir, best known for its data integration and analytics platforms, already employs around 1,000 people in the UK. Under the new deal, it has committed to hiring up to 200 additional staff directly, with a further 150 roles expected to be created across the wider UK defence technology sector.

The agreement is aligned with the recently published Strategic Defence Review and Defence Industrial Strategy, both of which emphasise AI, data and digital tools as central to future military capability.

The choice of Palantir as a partner is likely to attract some scrutiny. The process by which the company was awarded the contract for the NHS federated data platform attracted controversy, and many in the healthcare sector remain concerned about the impact of such an organisation having access to the health data of UK citizens.