The deal would have been Palantir’s largest yet in British policing, after others worth £330m and £240m with NHS England and the Ministry of Defence.
The row has been inflamed by the fact that Khan has previously made clear that Londoners only wanted to see public money being paid to companies that “share the values of our city”.
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The row has cast fresh light on Palantir’s record of winning public contracts in the UK. Scotland Yard previously appointed Palantir on a much smaller contract to use AI to monitor staff behaviour in an bid to root out corrupt officers. This contract was awarded directly, without advertisement or open competition, because its value was just below the £500,000 threshold required for City Hall’s approval.
Khan said on Thursday: “In general terms, what you’re allowing is these private companies to almost have a loss leader, so they give you a good deal or something for nothing for a short bit of time [and] you can become reliant upon them.”
In 2023 the government’s chief commercial officer raised concerns with Palantir about the practice of offering public services for a zero or nominal cost to gain a commercial foothold.
Donald Campbell, director of advocacy at the tech equity campaign Foxglove, said: “Palantir is notorious for its ‘land and expand’ approach, in which it wins small contracts or even offers free services at first, then uses those to build a much wider role in our public services.”.
He said Khan had “seen through this practice, and put a stop to it – while rightly highlighting Londoners’ concerns over Palantir’s ethical record”.
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Martin Wrigley, a Liberal Democrat member of the Commons science and technology select committee said he was “delighted” by City Hall’s decision.
“To get another contract without competition would have been a disgrace,” Wrigley said. “Palantir have failed to deliver to their promises on too many projects. Buying projects through free trials to then write the contract spec should be banned from government procurement.”
Khan’s move will be a blow to the Labour government’s efforts to use AI to improve policing. In January, the home secretary, Shabana Mahmood, called for police to “ramp up use of AI” and to adopt the technology “at pace and scale”.