Coventry City Council is rethinking its £500,000-a-year AI contract with Palantir after public protests over the firm’s ties to Israel’s military.
The decision follows union-led demonstrations, councillors voicing unease, and a growing national debate on whether controversial tech firms should shape vital public services.
Key Takeaways
- Coventry is first UK council to sign AI deal with Palantir.
- Labour leadership confirms review after worker and union protests.
- Palantir faces criticism for contracts with Israel’s military and NHS.
- Unions warn AI risks job losses and erodes public accountability.
- Council leaders argue AI is vital to avoid looming financial crisis.
Coventry City Council is reviewing its £500,000-a-year AI contract with Palantir after protests by unions and councillors over the firm’s ties to the Israel Defense Forces. Critics fear job losses and ethical concerns, while council leaders argue AI is necessary to cut costs and prevent financial collapse.
Why Coventry’s Palantir Deal Sparked Controversy
Coventry City Council has announced a formal review of its contract with Palantir, the US-based tech giant co-founded by billionaire Peter Thiel, after weeks of mounting protests.
The deal — worth £500,000 annually — positioned Coventry as the first UK local authority to roll out Palantir’s artificial intelligence tools across public services. But the partnership drew swift backlash from trade unions and councillors who object to Palantir’s ties to Israel’s military and its role in NHS data projects.
Union and Public Pushback
Protests outside Tuesday’s full council meeting were led by teachers, social workers, and campaigners demanding the council sever ties. Banners cited Palantir’s work with the Israel Defense Forces (IDF) and accused the company of “profiting from war.”
Inside the chamber, Labour deputy leader Abdul Khan assured demonstrators their concerns were heard. “We are reviewing the Palantir contract … I personally agree with the sentiments regarding divestment of funds linked to genocide, particularly in Gaza,” he told attendees.
Local councillor Grace Lewis echoed those concerns, calling the contract “indefensible” given cuts to public services.
Palantir’s AI in Coventry
The contract, which began in February following a pilot in children’s services, uses AI for tasks such as case-note transcription and summarising social work records. Coventry has also tested Palantir tools for screening household support fund applications.
Palantir insists its technology reduces “admin burden” for public servants, but unions argue the tools threaten jobs and risk turning welfare into an automated process.
The Financial Squeeze
Cabinet finance member Richard Brown defended the council’s need to innovate. Coventry, like many UK local authorities, has lost an estimated £1.6 billion in spending power since 2010.
“With more than 700 services to run, we simply cannot afford to stand still,” Brown warned. “AI is a valuable tool to help avoid a Section 114 notice — effective bankruptcy for councils.”
Pressed on whether Palantir’s systems would lead to redundancies, Brown declined to comment.
Palantir Under Global Scrutiny
Palantir, headquartered in Colorado, has faced growing scrutiny worldwide. Its CEO Alex Karp was directly challenged in May at a public forum over the company’s military ties, responding bluntly: “That’s true, mostly terrorists.”
The company has lucrative contracts with the US Department of Defense, immigration agencies, and the NHS. Critics say this track record makes it ill-suited for managing sensitive public services in the UK.
Next Steps for Coventry’s Leaders
Coventry’s Labour leadership has pledged to review the contract, though it has not confirmed a timeline or whether cancellation is on the table. For now, Palantir’s systems remain operational.
Unions, meanwhile, are promising continued pressure. “This fight isn’t just about Coventry — it’s about whether councils across Britain hand the keys of public services to private tech firms with troubling records,” said one campaigner outside City Hall.
Why This Local Fight Has National Stakes
The Coventry case could set a precedent. If the council walks away, other UK authorities may think twice before partnering with Palantir or similar firms. But if financial pressures win out, critics warn of a slippery slope where cost-cutting trumps ethics and jobs.
The Choice Facing Coventry
Coventry’s Palantir deal shows the tension between cash-strapped councils desperate for efficiency and a public deeply uneasy about the ethics of AI partnerships. The outcome of this review will resonate far beyond one Midlands city.