AI giant Perplexity taps London startup Valarian in sovereign tech drive

AI behemoth Perplexity has partnered with London-based startup Valarian to integrate its technology into UK government and defense systems, bolstering the nation's effort to lessen reliance on foreign tech infrastructure. This collaboration enables governments and businesses with sensitive data to utilize Perplexity's AI within their own systems, ensuring control over data processing and technology operation.

Valarian, which raised $50 million in July, has engineered software that empowers organizations to decide which AI models can access their systems, the data they can utilize, and the geographic location of individual tasks. The deal represents a significant commercial success for Valarian, as its technology now operates in four continents, as governments strive to harness advanced AI without relinquishing control over critical systems.

AI Minister Kanishka Narayan hailed the agreement as a testament to Britain's domestic technology prowess, stating that leading AI firms like Perplexity are increasingly choosing British companies to provide such services. The minister emphasized the need for Britain's public sector and critical industries to harness AI without ceding control over its operation.

This partnership comes as concerns rise over the UK's dependence on American Big Tech companies, which dominate advanced AI models and cloud infrastructure used by UK businesses. The government's top science advisory body recently warned that Britain risked becoming an "AI customer" rather than a technology developer unless domestic capabilities are strengthened.

Valarian CEO Max Buchan told City AM, "Organizations must secure and maintain control of their own data – by retaining the ability to track where it goes, how it is used, and who it is used by." Without this control, organizations risk dependence on uncontrolled infrastructure or technology that could leak their intellectual property.

Under the agreement, organizations can utilize externally-hosted AI for general research while keeping sensitive workloads within isolated infrastructure under their own control. Valarian founder and CEO Max Buchan added, "We shouldn't just be competing with Silicon Valley – we should be leading it." But true sovereignty, Buchan emphasized, is about more than the location of a company.

Perplexity, boasting over 45 million global users, believes the partnership will help it tap into sectors where data security has previously hindered AI adoption. "For many of them, the usefulness of AI was settled a long time ago," said Nate Kupp, Perplexity's vice-president of engineering for enterprise and infrastructure. "What's held them back is where it runs and who controls it," he added.

The agreement follows Valarian's $50 million Series A funding round, led by US venture capital firm New Enterprise Associates, bringing its total funding to $70 million. The move also aligns with the government's £500 million Sovereign AI Fund, as industry executives call for over £20 billion in investment over five years.