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Artificial intelligence firm Palantir is challenging the Pentagon's DIA over a contract to modernise its data analytics system. The AI company has accused the agency of wasting taxpayers' money and ignoring commercial AI solutions.
AI company Palantir is locked in a dispute with the Pentagon's Defense Intelligence Agency.(REUTERS)Artificial intelligence (AI) company Palantir is now fighting with the US Pentagon's Defense Intelligence Agency (DIA) for the right to bid on a contract to modernise its data analytics system.
Axios reported the development on Thursday (local time), stating that the battle comes at a time when the AI company already has a significant presence at the Pentagon, which could eventually extend to an agency responsible for delivering foreign military intelligence aimed at helping prevent and win wars.
Why is Palantir protesting against Pentagon DIA?
The artificial intelligence company argues that the DIA is wasting taxpayers' money and flouting the law by refusing to consider a commercial solution for its data analytics modernisation efforts.
According to the report, the DIA launched MARS (Machine-assisted Analytic Rapid-repository System) eight years ago and has been developing it ever since to replace a Cold War-era system.
Palantir argues that the agency is spending money trying to rebuild the system from scratch with unreliable results instead of opting for a commercial solution.
White House backs competition
According to a national security official in President Donald Trump's administration, the White House wants any company to be able to compete.
"The president has issued several EOs pushing to field the best tech the private sector has to offer," the official said.
The official also noted, "I wouldn't be surprised if there's swift action to remedy this and ensure any company that wants to compete is given a fair chance."
The official added that the General Services Administration, the DIA, or Defense Secretary Pete Hegseth could decide to scrap the MARS program and redesign it from the ground up, especially given how much AI technology has advanced since the program was launched nearly a decade ago.
London mayor blocks Palantir's deal with Met Police
In a separate incident, The Guardian reported on Thursday that London Mayor Sadiq Khan blocked a £50 million Met Police deal with the controversial US tech company Palantir, with City Hall citing a “clear and serious breach” of procurement rules.
According to the report, Scotland Yard had been in talks to use Palantir’s AI technology to automate intelligence analysis in criminal investigations. However, Khan intervened to stop the flagship contract, which would have been Palantir’s largest policing deal in the UK.
The Mayor’s Office for Policing and Crime (MOPAC), which is responsible for approving contracts of that size, refused to sign off on the deal. It said Scotland Yard had meaningfully considered only one supplier, Palantir, raising concerns that the Met could become too dependent on the company’s technology. Khan’s office also argued that the proposed contract failed to clearly demonstrate value for taxpayers’ money.
Palantir vs Anthropic
Earlier in March, Reuters reported that Palantir became the latest company caught up in the fallout from Anthropic’s disagreement with the Pentagon over AI safety protections, creating uncertainty around an important military software platform.
According to the report, Palantir's Maven Smart Systems platform, used by militaries for intelligence analysis and weapons targeting, relies on several prompts and workflows developed with Anthropic’s Claude AI.
In February, the US President ordered the US government to stop working with Anthropic after the AI company clashed with the Pentagon over policies related to autonomous weapons and government surveillance.
The dispute highlights the growing tensions over how the Pentagon should adopt AI technology, and which private companies will shape the future of US military intelligence and defense systems.
English (US) ·