German military rejects Palantir partnership over data sovereignty concerns

The German Armed Forces (Bundeswehr) currently have no plans to enter into a contract with the US data analytics firm Palantir Technologies, according to a senior military official.

Vice Admiral Thomas Daum, who oversees the Bundeswehr’s cyber defense, told the Handelsblatt newspaper that he does not anticipate such a partnership in the near term. “At the moment, I do not think this will happen at all,” Daum was quoted as saying.

Daum emphasized that despite the military’s interest in the functional capabilities of such databases, granting industry personnel access to national databases remains a non-starter. “No matter how much we are interested in the functionality of our own database, giving industry employees access to the national database is absolutely unthinkable at this time,” he stated.

The decision comes despite Palantir’s deepening integration with the US military. Last month, Reuters reported that Palantir’s artificial intelligence system would become an official program of record for the Pentagon, securing long-term usage of the company’s weapon-targeting technology across the US military.

The German military is currently evaluating AI tools to analyze battlefield data at speeds exceeding human capacity. However, German Digital Minister Karsten Wildberger recently told POLITICO that he favors the establishment of a European alternative to the American data giant.

“My preference is for us to develop our own products and companies in Europe that can compete on the global market,” Wildberger said in the interview. “Therefore, in the long term, we want to rely on European alternatives.”

Wildberger noted that suitable service providers already exist, but the challenge lies in scaling them up—a process he estimated could take “two to three years.” He urged governments to support smaller actors, calling it the only way to accelerate European alternatives. “We need to send a message that we can entrust them with such responsibilities,” he added.

Palantir is already utilized by law enforcement agencies in German states such as Bavaria and Hesse for data analysis. It is also integrated into systems used by Europol and nations such as Denmark.

Despite this, German military officials have expressed specific concerns regarding data sovereignty and the American company’s business model. This stance comes at a difficult juncture for US technology firms that rely on international government support for revenue while burning through capital ahead of highly anticipated initial public offerings (IPOs).

The Bundeswehr is currently establishing a secure private cloud for data processing and AI applications, a project it considers essential for modern digital defense. While Palantir serves NATO and several member states through its Maven platform, and Germany utilizes intelligence outputs generated by that system, Daum indicated that direct adoption remains off the table for the Bundeswehr’s internal needs.

Berlin has reportedly shortlisted three candidates for its cloud and AI project: German firms Almato and Orcrist, and France’s ChapsVision. Software testing is expected to take place this summer, with a contract signing anticipated before the end of the year.

Palantir’s political profile remains a primary source of hesitation in Berlin. Defense Minister Boris Pistorius previously expressed concerns over Palantir co-founder Peter Thiel’s minority stake in the German drone manufacturer Stark Defense. The contract for that project was only approved after the ministry received assurances that Thiel held no operational authority over the company.

Germany’s decision aligns with a broader global trend. Research by the Stanford Institute for Human-Centered AI (HAI) indicates that governments worldwide are racing toward “AI sovereignty” to avoid over-reliance on a small number of providers and their home countries.

The United Kingdom has reportedly allocated £500 million for a sovereign AI unit, while France and Brazil are developing internal regulatory frameworks for similar purposes. China remains the other major AI power positioned closely behind the US.

Washington has sought to counter this drive for independence. A February State Department cable signed by Secretary of State Marco Rubio instructed diplomats to lobby against foreign data sovereignty laws, arguing they could disrupt AI and cloud services provided by US firms.

The cable characterized the European Union’s GDPR (General Data Protection Regulation) as an unnecessary burden. However, recent developments suggest these frameworks have hardened, rather than softened, Europe’s resolve.

Germany’s procurement posture coincides with a period where some of the largest players in the US AI sector are preparing for IPOs while carrying losses that exceed their revenues.