(Bloomberg) -- The latest transatlantic technology brouhaha unfolded on Instagram.
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During a week in June when the leaders of the Group of Seven descended on France and Paris held its flagship technology conference, French Prime Minister Sébastien Lecornu took to the platform better known for aspirational travel content to announce his government was seeking a divorce with Palantir Technologies Inc.
The move followed US President Donald Trump's decision, four days earlier, to restrict foreign access to leading artificial intelligence models from Anthropic PBC. "France must have its own tools," Lecornu said. After years of Europe advocating for more digital sovereignty, there's a newfound sense of urgency to repatriate key services long outsourced to US companies.
Palantir, the controversial American data mining firm co-founded by billionaire Peter Thiel in 2003, is used to being a political punching bag. Still, it's become a part of the West's security apparatus, signing deals and memorandums with French spies, London police and the Polish armed forces. And the company was shocked by how the breakup unfolded, with one Palantir executive accusing Lecornu of treating important security decisions like a "Hollywood spat."
Lecornu named an obscure local challenger called ChapsVision as Palantir's replacement for its domestic intelligence agency. But the change won't happen overnight; Palantir signed a three-year extension in December.
Even so, the message was clear: Europe will back up its digital sovereignty concerns with actions. And, in a world increasingly skeptical of relying on American tech, Palantir is perhaps the most unabashedly Trump-aligned tech business. "They have a political agenda," said Chi Onwurah, a British parliamentarian who recently proposed ending the company's £330 million ($440 million) National Health Service contract. "Palantir represents an unacceptable point of weakness in our digital infrastructure."
Europe's needs are immense. The continent will have to spend about $3 trillion over the next decade on cloud infrastructure, AI data centers, large-language model training and other technologies if it wants to wean itself off US and Asian suppliers, according to Bloomberg Intelligence senior analyst Mandeep Singh. Guaranteed demand via a "Buy European" framework might be the EU's most powerful lever to promote software independence, he said in a July 7 report.
A cadre of local companies are ready to take a swing at Palantir. Lecornu also announced the French state was working more with Parisian darling Mistral AI, which is increasingly competing with the data analytics company. Two British startups co-founded by Palantir alums, called Valarian and Arrakis, raised money in July to challenge their former employer.
European officials are encouraging the newcomers. Security services in Germany and Poland are looking to homegrown alternatives. The Dutch defense minister has pledged to swap Palantir for European providers when possible. On top of its work with France's domestic spy agency, the DGSI, ChapsVision has won contracts across French national ministries and departments. Those deals will accelerate conversations the company is having with governments across Europe, according to Chief Executive Officer Silvano Sansoni.
"Our ambition is to be a European champion," he said in an interview.
It's an unusual candidate. Based in the western Paris suburbs, the seven-year old company hasn't attracted blue-chip venture capital investors or star engineers that have flocked to buzzy startups like Mistral AI. Instead, ChapsVision looks more like a private equity roll-up operator that buys up small companies and combines them for a bigger footprint. It has purchased 29 firms to date, cobbling together a core software service called Argonos that's designed to analyze disparate datasets.
Sansoni expects the bulk of the company's growth in the next few years will come via acquisitions, which he sees as a way to enter national markets. "Just to make sure we're German in Germany, Italian in Italy," he said.
For now, though, being French in Europe is enough to open doors. The French DGSI contract alone would be at least $100 million, Bloomberg analyst Singh estimated. Politico reported in May that Germany's domestic intelligence agency, BfV, picked ChapsVision to replace its Palantir contract. Poland's defense ministry, which signed a letter of intent to work with Palantir in October, is evaluating rival European providers, a person familiar with the process said in June asking not to be identified discussing government deliberations. ChapsVision is in talks with "all the sensitive clients" in Poland, while Germany is the company's "main focus" in the immediate future, Sansoni said, without elaborating on any government deals outside of France. Poland's defense ministry did not respond to a request for comment. Germany's BfV declined to comment.
European executives like Sansoni argue that they can match Palantir's capabilities while letting national clients keep sovereign control over tech, a key selling point in today's political climate. Yet analysts and national security veterans worry about what the continent might lose by shifting off an established supplier. "It would be crazy to exclude it," said Richard Barrons, a retired general who led the UK's strategic command center. "You're going to deny yourself world-leading capabilities."
Still, Trump's recent moves on AI, like the Anthropic restriction and reports the US government might take a stake in OpenAI, have accelerated panic about relying on Silicon Valley, particularly for anything that touches mission-critical work. "That's the temptation to isolationism," warned Barrons, now a senior fellow at the International Security Programme at Chatham House. Some officials in the UK, Palantir's second-largest market, have called for a re-evaluation of its £240 million deal with the nation's defense department.
The digital sovereignty movement has evolved from concerns about where and how data is stored to anxiety that critical systems could be cut off "if there were geopolitical turmoil with the US," said Noah Sylvia, a research fellow for the defense think tank RUSI. It remains an "open question" how good the products from Palantir's European rivals are, he added.
Stanislaw Kastory, a Warsaw-based partner at the venture firm Expeditions, which has backed companies in the sector, said European alternatives need time to develop.
Many executives admit as much. French startup Comand AI, which sells battlefield management software that competes with Palantir, recently inked a deal with Sweden's Saab AB and plans to open offices in Germany and Poland. However, CEO Loïc Mougeolle acknowledges European military software is not yet world-class.
"Every time you use a non-European solution you miss, as a country, an opportunity," Mougeolle said. "This is a strategic urgency."
One reason is that Palantir does many things. Its Foundry software specializes in patching together data from various files and silos, and is marketed to spies, police, healthcare agencies and large enterprises. The $296 billion company also makes algorithms for the battlefield. It has deployed command-and-control software in Ukraine following Russia's full-scale invasion, creating a system that works jointly with a local solution to boost its capabilities, according to Michał Matlak, director of the Institute of Innovation and Technology, a Polish think tank.
While European countries should develop their own combat management systems, Palantir's services are still needed, Matlak said. "Poland cannot afford to give up tools proven in war conditions," he said. "And Palantir's solutions are." Palantir says insisting on using local suppliers can come at the expense of public services and safety. Pierre Lucotte, deputy CEO for Palantir France, said some federal agencies would rather forego necessary software than pay the company. "It's a lose-lose situation," he said.
Palantir began working in France after the 2015 Bataclan terror attack. The company, which was born in the aftermath of the Sept. 11 attacks, markets its software as an effective counter-terrorism tool, capable of scouring everything from drone footage to classified records. It also expanded into the corporate market in France, signing deals with Airbus SE and Peugeot's parent Stellantis NV. Lucotte said France is the company's third-largest market by sales, following the US and UK. (The company doesn't break out French sales; in the most recent quarter, 79% of revenue came from the US.) An Airbus representative said the manufacturing firm continues to work with Palantir on aviation software.
Given that the DGSI recently signed an extension, Lucotte didn't expect Lecornu's political theater with the ChapsVision announcement. He said the company had been told the next DGSI renewal would go to a French provider, but Palantir still believed the agency was pleased with its work. "They let everyone believe that the contract was ended on the spot," Lucotte said. Josh Harris, another Palantir executive, blasted Lecornu in French newspaper Le Monde.
Lucotte pushed back on the notion that Palantir couldn't provide the types of data security guarantees European officials desire. "I don't think Palantir and sovereignty are incompatible," he said.
While some have questioned if Palantir can keep its technical promises, a more fundamental concern is whether such digital scaffolding should come from overseas at all. French entrepreneur Olivier Dellenbach formed ChapsVision in 2019, describing it as a necessary domestic alternative to American security software. Dellenbach isn't Thiel rich, but he's wealthy; he sold his prior company, an investment software firm called eFront, to Blackrock Inc. for $1.3 billion. He named ChapsVision after the initials of his children, and vowed in a 2021 interview to build a "sovereign platform" he wouldn't sell to a US firm.
Last November, Dellenbach transitioned to chair and picked Sansoni, an Italian-born former sales executive at International Business Machines Corp., as CEO. The company declined to make Dellenbach available for an interview. But Sansoni said his boss still controls the company and has pledged to maintain European ownership through its eventual public listing.
According to Sansoni, ChapsVision began talking to the DGSI in 2021, and spent the last five years proving its bona fides to win the contract. He declined to say when it would be capable of matching Palantir's full scope of work for the spy agency. "Technology is complex," Sansoni said. "So we will not replace Palantir tomorrow."
Still, he says his firm is different because of its "very open" software architecture and the fact it isn't dependent on non-European tech. At the VivaTech conference in Paris in June, ChapsVision announced its Argonos software would run on Scaleway, a French cloud computing provider.
While ChapsVision is benefiting from Europe's sovereign push, Sansoni stressed that it has marquee customers in the US, including Boeing Co. and ExxonMobil Holdings Corp., which use the enterprise search service Sinequa that ChapsVision bought in 2024. "They don't just give you the keys," he said. The main challenge for ChapsVision will be integrating its own thicket of subsidiaries and products, according to Nick Patience, an analyst with The Futurum Group. Buying so many companies so quickly can lead to "feature overlap and a fragmented user experience," he wrote in a note before the French government announcement.
Patience also questioned how European any company is in an interconnected world. ChapsVision, for example, has touted a partnership with French software firm Alcatel Lucent Enterprise, whose majority owner is China Huaxin, a state-run IT operator. "One-hundred percent sovereignty is not achievable," Patience said in an interview. (A ChapsVision representative didn't comment on the partnership.)
After booking about €200 million ($228 million) in sales last year, Sansoni said ChapsVision expects a 50% jump in sales this year and aims to top €1 billion by 2030. Yet it remains a fraction of the size of its prominent competitor. Palantir finished 2025 with $4.5 billion in sales and $1.6 billion in net income. Analysts expect Palantir revenue to grow 73% this year.
Sansoni insisted that he doesn't spend much time thinking about the larger American rival. "They're more focused on us at this moment," he said.
--With assistance from Konrad Krasuski, Kevin Crowley and Siddharth Philip.
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