The German Armed Forces are foregoing Palantir and are examining alternatives: Almato (Stuttgart), Orcrist (Berlin) and Chapsvision (Paris)

NATO says yes, Germany says no: The risky dispute over the Palantir software

Too great a security risk: That's why US software is not allowed in the German Armed Forces' cloud

The decision was made with a single, concise sentence – yet its implications mark a tectonic shift in European security policy. The German Armed Forces (Bundeswehr) have issued a clear rejection to the US data giant Palantir regarding the construction of its planned military cloud. The reason is not a lack of technological quality, but rather a deep concern for national security: The Silicon Valley company's operating model allows too much access to highly sensitive military data. Instead of becoming dependent on transatlantic tech giants, Germany is now ushering in a digital revolution. With Almato from Stuttgart, the Berlin-based startup Orcrist, and ChapsVision from Paris, three European challengers are poised to win one of the country's most strategically important IT contracts. At stake are billions in investments, the fight against overwhelming algorithms, and the fundamental question: To whom do we entrust the digital nervous system of our defense in times of crisis?

German Armed Forces say no to Palantir

When data becomes a weapon – Europe's digital defense begins with a refusal

Vice Admiral Thomas Daum, Inspector of Cyber ​​and Information Space for the German Armed Forces, succinctly summarized a far-reaching strategic decision: "I don't see that happening at all right now." He was referring to the use of software from the US data analytics company Palantir Technologies for the German Armed Forces' planned military cloud. What appears on the surface to be a pragmatic procurement decision is, in reality, a symptom of a profound tectonic shift in European security policy: a move away from technological dependence on the transatlantic partner and a move toward digital sovereignty. Three European challengers – Almato from Stuttgart, Orcrist from Berlin, and ChapsVision from Paris – are now competing for one of Germany's most strategically important IT contracts.

The core of the problem: Who is in the driver's seat?

The German Armed Forces' rejection of Palantir cannot be reduced to simple anti-American stereotypes. It is based on a concrete, structural security problem, which Daum named: the operating model. At NATO, Palantir employees themselves operate the software – they are effectively at the heart of the military data system and have access to highly sensitive information. As much as the German Armed Forces are interested in the functionality of the Palantir platform, granting industry employees access to national data is inconceivable, Daum explained in the Handelsblatt interview.

This objection touches upon a critical point in modern defense architecture. Military cloud systems are not ordinary corporate IT. They process classified information of varying levels of secrecy, from VS-NfD (classified – for official use only) to VS-Vertraulich (confidential) and up to the highest classification levels. The Federal Office for Information Security (BSI) prescribes strict technical and organizational requirements for such systems – and a central principle is complete control over data access by government agencies. No private company, regardless of its nationality, may be granted uncontrolled access to the nervous system of the German armed forces.

Palantir rejected the criticism, emphasizing that customers could install and use the software without requiring Palantir employees to be on-site. However, this statement misses the point: NATO's operating model is different, and it is precisely this model – with in-house operators within military systems – that the German Armed Forces (Bundeswehr) rejects. The company's disappointment is understandable: According to a Palantir spokesperson, such a contract would have been significant for their German business.

Palantir: A company caught between data power and political controversies

To understand the implications of the German Armed Forces' decision, it's worth taking a look at the rejected applicant itself. Palantir Technologies was founded in Silicon Valley in 2003, primarily by the German billionaire and technology ideologue Peter Thiel. Originally developed for the CIA to track the financial transactions of terrorist networks, the company has since massively expanded its analytical technology. Its platforms process satellite geodata, biometric data, intelligence reports, and telephone recordings to create real-time situational awareness. This allows Palantir to not only analyze but also assess potential military targets in real time.

Financially, the company is experiencing a period of impressive growth: In the fourth quarter of 2025, Palantir increased its revenue to US$1.41 billion, a 70 percent increase compared to the previous year. For the full year 2025, the company recorded revenue of US$4.48 billion. For 2026, management forecasts revenue of US$7.18 to US$7.20 billion. With a market capitalization of approximately €289 billion in April 2026, Palantir is among the most valuable technology companies in the world.

This stock market success corresponds to an increasingly close integration with the US security apparatus. At the end of July 2025, the Pentagon signed a framework agreement with Palantir with a total value of up to ten billion US dollars over ten years. This agreement consolidates 75 individual contracts and effectively makes Palantir software the standard operating system for key areas of the US armed forces – from battlefield information processing and arms supply chain logistics to personnel management. In parallel, the NATO Communications and Information Agency (NCIA) acquired the MSS NATO (Maven Smart System), which provides AI-supported decision support for commanders. The procurement was one of the fastest in NATO history – only six months elapsed from the initial requirements assessment to the awarding of the contract.

It is precisely this dynamic – the deep merging of a private company with state security structures – that worries European observers. Critics speak of a “privatization of sovereignty”: decisions about military objectives and troop movements are increasingly made by algorithms that are not controlled by military leadership, but by a private company whose founder holds political views that are difficult to reconcile with European democratic ideals. Once established, dependence on Palantir software is virtually irreversible – therein lies the real strategic risk for sovereign states.

The three challengers: Europe's answer to Silicon Valley

Instead of relying on the tried and tested, but controversial US platform, the German Armed Forces have selected three European companies for an evaluation, whose software is to be tested in the summer of 2026 – with a contract award decision expected by the end of the year.

Almato (Stuttgart): Semantic intelligence from the German Mittelstand

Almato, headquartered in Stuttgart, is a subsidiary of the German IT group Datagroup. The company is the most established of the three candidates, as evidenced by a key advantage: Datagroup is the first provider to hold a BSI certificate for a Managed Private VS-NfD Defense Cloud. This means that the infrastructure is already approved according to the strictest German security requirements – a fundamental prerequisite for any military use.

The core product is the Bardioc semantic data platform, which transforms unstructured datasets into context-rich, actionable insights. Bardioc leverages cutting-edge semantic technologies, AI-powered data analytics, and machine learning to identify patterns and anomalies in datasets at an early stage. This capability for automated pattern recognition in heterogeneous data pools is particularly valuable for military and intelligence applications. The platform can be deployed as Software-as-a-Service in a defense cloud or as a containerized solution for on-premises installations—a flexibility advantage that is especially relevant for security-sensitive environments.

Orcrist Technologies (Berlin): Situational awareness intelligence from the start-up ecosystem

The Berlin-based startup Orcrist Technologies represents the younger and more agile type of European defense tech company. With a team of 11 to 50 employees, it is considerably smaller than its competitors, but has focused on a clear strategic niche: AI-powered real-time situational awareness and sensor data fusion.

Orcrist's platform structures millions of unordered data points into a comprehensive, up-to-date, and precise situational awareness picture. The company describes itself as a "data defense technology company" and operates at the intersection of technology and military decision support. In a strategic report from 2026, Orcrist was characterized as a "niche enabler of European information dominance," facilitating AI-powered intelligence fusion for the battlespace. This core competency is of direct relevance to a modern military cloud designed to integrate information from diverse sources and sensor networks.

The risk with Orcrist lies in the company's size: A small start-up naturally carries higher failure risks and may have limited capacity for quickly scaling a large order. At the same time, start-ups are often more innovative, agile, and willing to develop customized solutions than large corporations with rigid product lines.

ChapsVision (Paris): The “French Palantir” with a European data protection standard

ChapsVision, based in Paris, is known as the "French Palantir" for good reason. The company offers a comprehensive, AI-powered platform for big data analytics, OSINT (Open Source Intelligence), predictive intelligence, and sovereign defense AI. As a European leader in data processing and agent AI, ChapsVision has already secured customers in the French government and military sectors.

In September 2025, ChapsVision entered into a strategic partnership with Alcatel-Lucent Enterprise to offer European companies and government agencies an alternative to US cloud solutions. The initial focus of this partnership is on France and Germany – a clear indication that ChapsVision is strategically prioritizing the German market. Further collaborations with the systems integrator Capgemini underscore its ambition to act as a trusted partner for government institutions.

ChapsVision explicitly emphasizes the sovereignty of its infrastructure: The platform is designed for operation in classified and unclassified environments and relies on a modular, scalable architecture that can be adapted to the specific security requirements of law enforcement agencies. In doing so, the company directly addresses the core objection to Palantir: complete data control by the operator, without in-house operators.

A comparison of the candidates

Hub for Security and Defense - Image: Xpert.Digital

The Security and Defence Hub offers expert advice and up-to-date information to effectively support companies and organizations in strengthening their role in European security and defence policy. Working closely with the SME Connect Defence Working Group, it particularly promotes small and medium-sized enterprises (SMEs) that wish to further develop their innovative capacity and competitiveness in the defence sector. As a central point of contact, the Hub thus creates a crucial bridge between SMEs and European defence strategy.

Related to this:

• The SME Connect Defence Working Group – Strengthening SMEs in European Defence

The strategic environment: Europe's digital transformation

The German Armed Forces' decision comes at a geopolitical moment that could hardly be more dramatic. Germany is increasing its defense spending to €108.2 billion for 2026, divided into €82.69 billion in the regular defense budget and €25.51 billion from the special fund for the German Armed Forces. The industry association Bitkom estimates an additional investment requirement of €83 billion by 2029 for the digitalization of the German Armed Forces alone. BWI GmbH, the German Armed Forces' IT service provider, has already announced an investment volume of €6 billion for the digitalization agenda by 2029.

In this context, the cloud contract that Almato, Orcrist, and ChapsVision are competing for is far more than a single procurement project. It is the nucleus of a military digital infrastructure that will shape the entire information architecture of the German Armed Forces in the coming years. Software that integrates information from various databases and enables AI-supported analysis is the central nervous system of any modern armed force.

At the European level, the decision takes on even greater symbolic significance. In November 2025, at the summit on European digital sovereignty in Berlin, German Chancellor Friedrich Merz and French President Emmanuel Macron emphasized that Europe's digital independence is crucial for its security, defense capabilities, and economic competitiveness. Companies from both countries agreed to invest over €12 billion in European digital partnerships. Germany and France established a joint task force for digital sovereignty, explicitly focused on cloud services, artificial intelligence, and cybersecurity. The Bundeswehr's list of candidates—including two German and one French company—reads like an operational implementation of these political declarations of intent.

The European Defence Tech Boom as an Economic Context

The German Armed Forces' decision comes at a time when European defense tech companies are being seriously considered as alternatives to US market leaders for the first time. Venture capital investments in European defense, security, and resilience startups are expected to exceed eight billion dollars in 2026 – compared to less than 500 million dollars in 2015, this represents growth of over 1,500 percent in a decade. Investments of around two billion euros are expected for 2025 alone – almost twice as much as the previous year. Germany is the market with the strongest growth.

The European defense tech ecosystem now comprises around 384 startups, about a third of which were founded in the last ten years. However, there is a strong concentration of funding on just a few companies: more than two-thirds of the total capital flows to Helsing, Quantum Systems, and ALL SPACE. The three bidders for the German Armed Forces contract – Almato, Orcrist, and ChapsVision – are positioned in the middle of the ecosystem in this statistic, in terms of their funding base, not their technological relevance.

Despite this positive development, a sobering comparison remains: Total European defense tech funding is minuscule compared to individual US deals. Anduril Industries, a US competitor of Palantir, raised a remarkable $2.5 billion in a Series G funding round in 2025 alone, valuing the company at $30.5 billion. This illustrates the still significant structural gap between the European and American defense technology ecosystems – and how crucial public procurement contracts, such as those from the German Armed Forces, are for the development and survival of European providers.

The paradox: NATO relies on Palantir, the German Armed Forces reject it

The Bundeswehr decision raises an uncomfortable question that is not easy to answer strategically: How sovereign can national digital policy really be if the overarching defense alliance – NATO – uses the same provider that Germany rejects for itself?

NATO has procured the Maven Smart System NATO, an AI system based on Palantir technology. It is designed to enable commanders and combat leaders to utilize state-of-the-art AI in key military operations – from information aggregation and target acquisition to accelerated decision-making. For a German vice admiral participating in NATO operations and required to work with Palantir systems there, while relying on European alternatives at home, this creates an operational complexity that will need to be resolved in the long term.

This contradiction is not an isolated case, but rather symptomatic of the structural tensions in European security policy: the pursuit of strategic autonomy on the one hand, and integration into a transatlantic alliance on the other. The solution lies not in withdrawing from NATO, but in strengthening European providers to a level of maturity that allows them to be competitive at the alliance level as well. This is precisely what makes the Bundeswehr's mission a precedent with implications far beyond Germany.

Risks and challenges of the European solution

The strategic decision to favor European providers is politically sound – but it is not without entrepreneurial and operational risks. Palantir is a far more mature product with years of experience in military deployments, a proven ecosystem, and enormous development resources. The three European candidates face a greater burden: they must prove that their platforms are as capable as the US market leader under real-world conditions – and do so during an evaluation phase in the summer of 2026, with the contract awarded by the end of the year.

Especially for Orcrist, as a small start-up, the question of scalability arises. A German Armed Forces contract in this segment would transform the company overnight – with all the opportunities, but also the risks, of rapid growth. In the past, small companies have sometimes struggled to maintain quality standards and meet delivery commitments under the pressure of large government projects. Therefore, the German Armed Forces must assess not only the technology itself, but also the organizational viability of the applicants.

Furthermore, all three candidates face a complex regulatory framework. The EU has created a dense set of rules with the Cyber ​​Resilience Act, the AI ​​Regulation, and the NIS2 Directive. Systems with both civilian and military applications – dual-use products – are subject to special requirements: Anyone supplying an AI solution to the German Armed Forces but also operating in the civilian market must comply fully with the AI ​​Regulation, including risk management, data governance, and conformity assessment. This significantly increases the workload for all applicants.

Economic dimension: When procurement policy becomes industrial policy

From an economic policy perspective, the Bundeswehr decision is an act of deliberate industrial policy. By specifically favoring European suppliers and excluding US alternatives, Germany is using its public procurement power to strengthen the domestic and European tech ecosystem. This is not protectionism in the classical sense, but rather a response to the technological asymmetry between Europe and the US.

Public procurement contracts have repeatedly acted as crucial growth catalysts in the history of the technology industry. For decades, the US Department of Defense has used government contracts to help companies like Intel, Google, and Palantir grow into major players. Europe lags behind in this strategic use of public demand. If the German Armed Forces now give preference to Almato, Orcrist, or ChapsVision, they are creating an invaluable reference customer – one that not only enhances these companies' credibility in other European markets but also sends a strong signal to other national procurement agencies in the EU.

This aspect is particularly significant for Germany's small and medium-sized IT companies. Almato, a Datagroup subsidiary, and Orcrist, a Berlin-based startup, exemplify an industry structure that, despite high quality, is often disadvantaged compared to global tech corporations because it lacks an international reference customer. A contract with the German Armed Forces would partially compensate for this structural deficit and could spur the emergence of a new class of European defense tech champions.

Geopolitical dimension: Trust as a strategic resource

Behind the technical discussion about operating models and security certifications lies a fundamental geopolitical question: How much trust can and should Europe place in American technology platforms when the political relationship between the US and Europe is increasingly characterized by uncertainty?

Under the Trump administration, the transatlantic relationship has noticeably changed. Unilateral trade policy decisions, the questioning of NATO security guarantees, and the close ties between technology companies and political power structures have awakened an awareness of structural dependencies in Europe that would have been unthinkable just a few years ago. When a company like Palantir acts as a quasi-state actor within the US security apparatus, its core infrastructure anchored by a ten-billion-dollar contract with the Pentagon, then the question of access to data stored in European systems is no longer a theoretical consideration.

Chancellor Merz coined a strategically significant phrase in the context of the Digital Summit: "As a state, we must lead the way, be resilient, and be prepared, especially for times of crisis." This quote could serve as a guiding principle for the Bundeswehr decision. Resilience in times of crisis means, not least, that the command structure functions even when political tensions arise with the host country – and that no foreign company, through its operating model, effectively gains veto power over German data access.

What's at stake

The evaluation of the three European candidates in the summer of 2026 and the planned award by the end of the year are not the end, but the beginning of a long process. Over the coming years, the German Armed Forces will build their own secure private cloud for data processing and AI applications. A key component of this cloud is precisely the software for which Almato, Orcrist, and ChapsVision are now competing: a platform that aggregates information from various databases and makes it usable for operational decisions.

Whoever wins this contract will not only receive a contract, but also the power to shape the digital infrastructure of the German armed forces for the next decade. At the same time, the decision will set a precedent for other European NATO partners who have to make similar strategic decisions. France, which is fielding its national champion ChapsVision in the bid, is likely to follow the award with particular interest.

Palantir's cancellation by the German Armed Forces is therefore more than just a lost contract for a successful US company. It marks a moment when Europe begins to draw the consequences from the realization that digital dependence means strategic vulnerability. Whether the European alternatives are technologically and organizationally ready to meet this expectation will become clear this summer. The political will to do so has certainly been articulated – belatedly, but clearly.

Markus Becker

I would be happy to serve as your personal advisor.

Head of Business Development

Chairman SME Connect Defense Working Group

LinkedIn

Konrad Wolfenstein

I would be happy to serve as your personal advisor.

me at wolfenstein∂xpert.digital contact

Just call me on +49 7348 4088 965 .

LinkedIn