Give Palantir up to $244m through 2028, says internal Defense Department memo

An internal Defense Department memo, addressed to senior Pentagon leaders and field activity directors, has directed subordinates to purchase up to $243.9 million in services from AI-enabled data analytics company Palantir through March 31, 2027. The memo, dated August 4, 2026, effectively constitutes a sole-source or no-bid consulting contract, though its finalization status is unclear.

Palantir has previously benefited from similar no-bid contracts, including a $3.9 million USDA contract and a $30 million no-bid contract with Immigration and Customs Enforcement. The memo instructs military leaders to identify further funding options from April 1, 2027, to December 31, 2028. The Defense Department claims Palantir is enhancing efficiencies within the defense industrial base and improving understanding of delays in munitions and vehicle production.

Critics argue the memo may lack justification for the exception to competitive bidding requirements, citing the Defense Department's obligation to use competitive contracting practices under 10 USC 3204. Senator Elizabeth Warren has urged Deputy Secretary of Defense Stephen Feinberg to address conflicts of interest related to current Defense Department contracts, noting Palantir's ties to donors and administration officials.

Palantir's CEO, Alex Karp, has criticized major American AI frontier labs and promoted open-weight models. The Department of War characterized the planning directive as standard practice, representing routine engagements with industry partners aimed at accelerating production timelines.