Buying British?

Welcome to the eight edition of The Eye—our weekly guide to the shifting relationship between Big Tech and the state.

This week: Britain’s dependence on US tech, Palantir’s grip on the state and whether a vow to “buy British” can mean breaking with Big Tech.

While the Burnham government is, so far, largely keeping its powder dry on new announcements around developments in the space of tech and AI, questions are mounting about the approach it will take going forward in a number of key areas.

In a gear-shift from the previous administration, he’s reportedly set to move away from Starmer’s love-in with US tech giants, spearheaded under Britain’s former US ambassador Peter Mandelson, to focus more on British companies, echoing actions being taken throughout Europe in response to the Trump administration’s hostile foreign and trade policy approach.

The future relationship between UK and US business interests will likely become more clear in the weeks to come, and following next month’s UN General Assembly opening in New York, where a potential first meeting between Trump and Burnham could occur.

Under Starmer, the government faced repeated criticism for cosying up to and handing out multi-million pound contracts to American firms. A Guardian investigation found that under his administration, tech companies like Amazon, Meta, Microsoft, and Elon Musk’s X held hundreds of meetings with people at the heart of government, at a rate of more than one per working day.

Notably companies like Palantir and Anduril, both backed by Trump-aligned billionaire Peter Thiel, became more deeply enmeshed in the UK state under Starmer’s tenure. Palantir landed its biggest ever UK defence contract under Starmer’s administration - a £240m deal. The UK also signed a £30 million ‘drones for Ukraine’ deal with autonomous weapons manufacturer Anduril under Starmer, agreed by then-defence secretary John Healy, ahead of a meeting that took place with his US counterpart Pete Hegseth.

Issues regarding Mandelson’s conflicts of interest around Palantir’s awards dogged the PM as his time in office drew to a close, with critics pointing to a lack of transparency surrounding them, and lobbying on the part of Mandelson, whose now defunct firm Global Council was on a £30,000 per-month retainer with the company.

Criticism surrounding awards to Palantir in particular have been becoming more pronounced in recent months, not only due to the lack of transparency and competitive tender, but fears about vendor lock-in to US companies in key national infrastructure, the effectiveness of the products themselves, and growing unrest about the company’s work with US Immigration and Customs Enforcement and support for the Israeli military operations in Gaza.

Research has found that the UK private sector overwhelmingly depends on US technology to operate essential services, with 88% of publicly listed companies relying on American providers. Burnham inherits a country where “buying British” could well be much harder than the slogan suggests.

Former science and technology secretary Liz Kendall told The Times that it was imperative that the UK reduced its reliance on foreign-owned technology, as it puts national security at risk in a world where what she described as the international rules-based order was “gone for good”.

The pressure is now on for Burnham to make good on his promise to invest in British companies as MPs, healthcare experts, and NHS insiders are calling on him to ditch Palantir’s controversial £330m Federated Data Platform (FDP) contract with the NHS, citing poor engagement and with product.

While Burnham has publicly said little about Palantir, two parliamentary committees have now urged Labour to scrap the NHS deal, exercise a 2027 break clause and find a replacement. They are joined by multiple local councils who have spoken out about the deal, and campaign organisations like Foxglove which are petitioning the government to end the agreement.

The government is set to decide by the end of the year whether to end Palantir’s involvement in the health service.

But the government’s appetite for taking necessary action on US influence in key infrastructure is going to be put to the test, not only with the FDP, but elsewhere too. Palantir is also in the running and is a potentially preferred choice to provide a new Home Office data-sharing plan to integrate national police datasets at an expected cost of £250 million.

The UK subsidiary of Anduril, too, is one of four firms (along with Tekever, Thales, and BAE Systems), classed as “British-based industry suppliers” in the running to supply Ministry of Defence’s new ‘Wingman’ project, and the company has been on an aggressive hiring spree of former government officials, including the former head of the UK Space Command.

The firm’s presence in the UK has ballooned to employing over 150 personnel in the UK, a third of which are former defence employees. Questions remain about whether British-based US firms qualify as “buying British”.

Burnham’s rhetoric so far has largely focused on domestic affairs, but there is some indication that, at least potentially, he may opt to take a cooler approach to UK-US relations. He has defended previous comments he has made about the US president, in which he described American politics as “poisonous” and “polarised”, stating that Trump has likewise “said things as well”, though the two have also begun their relations by expressing warm sentiments to one another during phone conversations.

However, as with Starmer, he will find himself under pressure from the US to increase defence spending, and his approach to handling firms like Palantir and Anduril, as well as his broader approach to US companies’ influence, could place him at odds with the Trump administration if he is to keep his promises to truly invest in Britain.

In April, prior to Burnham assuming office, the House of Lords Relations and Defence Committee published a report stating that the UK must adjust to the new reality regarding foreign policy, and instead “rebalance its approach towards the US”, dismissing previous sentimentality about any kind of “special relationship” in favour of keeping a pragmatic and more transactional approach.

One person involved in discussions within Burnham’s team regarding his proposed realignment to focus on home-grown solutions called “unfettered tech boosterism” a “vote loser”, and that the government’s over-reliance and courting of US tech companies had been a “geopolitical failure that hasn’t delivered on its intended aims [and has] also put the Labour government at odds with its voters and the vast majority of the British public”.

Burnham’s talk of buying British will be tested against some harsh realities in the early days of his administration. The imminently expected decision on the NHS FDP and the awarding of the contract for national police and Home Office data integration will present real tests to how his government will approach key questions of ownership and control of the technology underpinning vital state functions.

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About The Eye: In an era where Silicon Valley is rewriting the rules of governance and unaccountable tech companies are capturing our public services from the inside out, The Eye exists to follow the power, connect the dots and reveal how technology is reshaping our state.