The tiny British firm challenging Palantir’s government contract stranglehold

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In the House of Commons in the late 1920s, John Buchan and Oswald Mosley sat across the chamber from one another, before finding themselves on opposite sides of the defining political struggle of their age. Buchan, director of information at the British War Propaganda Bureau and author of the spy novel The Thirty-Nine Steps, became one of the British establishment’s committed anti-Nazi voices; Mosley left Parliament to found the British Union of Fascists.

Nearly a century later, the Buchans and the Mosleys find themselves on opposite sides of a new contest over power: who will build the digital infrastructure of the British state. Louis Mosley, Oswald’s grandson, runs the UK arm of Palantir, the American software company embedded across government, from the NHS to the Ministry of Defence. Max Buchan, John Buchan’s great-grandson, is the 31-year-old founder of Valarian, a London startup seeking to challenge Palantir’s dominance.

The case against Palantir is probably familiar to you by now. The company has drawn criticism for its work with US Immigration and Customs Enforcement, whose agents have used its tools to track and deport undocumented immigrants, and for its technology’s use by the Israeli military in Gaza. And its co-founders are two of Silicon Valley’s most vocal ideologues – Peter Thiel, who once wrote that he no longer believed “freedom and democracy are compatible”, and Alex Karp, who said Palantir’s work helps to “scare enemies and on occasion, kill them”.

And yet Palantir’s presence in the British state has, until recently, looked all but inevitable. In 2023, a consortium led by the company won a seven-year, £330m NHS contract and, since then, the company’s public-sector footprint has grown beyond the NHS into areas including defence, policing and financial regulation. 

But, as one tech insider put it to me recently, it is “astonishing” how quickly the public mood has started to shift against Palantir. Last month, MPs warned that the company’s expanding role in the public sector had become an “unacceptable point of weakness”, urging ministers to consider using the NHS contract’s March 2027 break clause. And last week, the Telegraph reported that Andy Burnham, expected to succeed Keir Starmer as prime minister later this month, is minded to remove Palantir from the health service entirely if he enters Downing Street. Palantir and its supporters argue that the technology saves lives, and that ripping it out would be costly, risky and potentially damaging to patient care. 

It is clear, when I meet him at Valarian’s swanky offices in Holborn, that Buchan sees an opening here for his business. But he is careful not to frame the company as a rival: Valarian, he says, comes from “a different part of the stack”. Where Palantir helps organisations make sense of data, Valarian says it creates sealed environments in which governments and companies can run databases, communications tools and AI models. (He also calls the relationship between his great-grandfather and Oswald Moseley “entertaining”, but says little more).

Nor will he criticise Palantir or its technology directly. What worries him is any single company embedded at the heart of a state’s critical systems. “It’s about optionality and it’s about our control,” he tells me. A government dependent on one supplier is in trouble whether they are American, German or French. “Vendor lock-in, especially for governments, is extremely dangerous,” Buchan says.

“Do I think the American government would give Valarian the kind of access that the British government’s given to Palantir?” he asks. “America would never base all of its critical infrastructure technology in Kent. It would be completely ludicrous… that’s where I come at it from.”

He is coy about whether he has met Burnham or his advisers, but he describes himself as “extremely bullish” about the new political atmosphere. He says he doesn’t want the new government to work with British businesses “for the sake of it”; instead, he wants the chance to prove that a British company can build critical technology.

Whether Valarian is that company is, for now, unclear. Buchan says it has deployed across four continents and works with “the UK and our allies”, but he declines to name customers or the value of its contracts when we speak. The company has raised $20m to date, a meaningful sum for a British startup, but tiny beside Palantir’s mammoth $300bn valuation. (Buchan says he is soon to announce a “significant” funding round, but he won’t disclose details about that either). One investor I spoke to said they were underwhelmed by Buchan. All of which makes his talk of building “a half-trillion-dollar company” employing thousands of people sound optimistic at best.

Plus, there are other British businesses hoping to take advantage of the bad press around Palantir. Quantexa, a London-founded software firm valued at $2.6bn, has just won a £175m, ten-year contract to hunt tax fraud for HMRC, one of the largest AI deals in British public-sector history. Defence-AI firms such as Adarga are pitching the same case to the military. 

But if the Palantir row has taught Britain anything, it is that the country made itself dependent on US businesses without ever seriously exploring whether it could build the technology itself. A new government should give businesses like Valarian a real chance to shine, or to fail.

Antonio Olmos for The Observer