We’re potentially growing a digital dependency, enriching what is fundamentally a U.S. company at the expense of our sovereignty,
said Vass Bednar, managing director of the Canadian Shield Institute. That warning comes as documents obtained by the Investigative Journalism Foundation reveal that the Department of National Defence has held a contract for Palantir Technologies’ Gotham software since 2020. The software deal was initially valued at $14 million and could reach up to $63 million, according to a contract that was internally flagged as not for public disclosure.
Department of National Defence Defends Secure Infrastructure
The Department of National Defence states that its Gotham software contract brings together information from military databases. The system operates on closed, classified networks inside secure facilities in Canada. However, the department declined to specify exactly what information Gotham processes, citing national-security concerns.
According to the Department of National Defence, a security assessment determined that no government data, prompts, outputs, or metadata handled under the contracts can be stored, accessed, or processed outside Canada. Officials maintain that the United States CLOUD Act has no authority over servers located in Canada.
Did You Know? Established in 2003 by five founders—including board chair Peter Thiel and CEO Alex Karp—Palantir Technologies has subsequently expanded to become a prominent defense and government technology supplier.
Legal Experts and Researchers Question Data Access Rules
Independent experts dispute the security assessments provided by the Department of National Defence. Barry Appleton, an international lawyer practicing both Canadian and American law, points to the U.S. CLOUD Act as a mechanism that allows authorities to compel covered U.S. companies to produce data within their possession, custody, or control. This applies regardless of whether the data sits inside or outside the United States.
Any data at any time that Palantir has, if it was subject to an order under the CLOUD Act would have to be produced,
Appleton said, noting that such matters are decided by American courts under American law. Jennifer Evans, a policy researcher and founder of PatternPulse AI, agrees that the legislation creates potential data visibility to some of the highest levels in the U.S. government. Evans suggests that the Department of National Defence should disclose additional details about the contract, including whether air-gapping is used to isolate networks.
Expert Insight: The friction between military procurement and foreign data jurisdiction highlights a growing international struggle for digital sovereignty. As nations grapple with reliance on U.S.-based software giants, domestic security safeguards must contend with broad foreign legal frameworks like the CLOUD Act.
International Push for Digital Sovereignty and Alternatives
The debate over Palantir aligns with a broader European movement seeking greater domestic control over technology and data. In July, France and Germany moved to reduce foreign reliance by examining domestic alternatives after ending Palantir contracts with their intelligence services. Meanwhile, U.K. members of parliament urged their government to terminate a 330-million-pound National Health Service contract following a report that a small group of company employees accessed identifiable patient data.
For Canada, analysts point to the risks of foreign technical dependency. Vass Bednar compares the situation to reliance on SpaceX’s Starlink internet technology in Ukraine, where military operations faced disruptions after accusations of throttled speeds. To mitigate these risks, researchers suggest investing in domestic options such as Vancouver-based Caseway or Ottawa-based Anvil, though experts acknowledge these alternatives do not yet match Palantir’s breadth and depth.
Details Regarding the Military Contract Value and Software Use
What is Palantir’s Gotham software used for by the military?
The Canadian military runs Gotham on secure, classified closed networks located within domestic facilities, where the platform integrates data originating from military databases, according to the Department of National Defence. The department has declined to specify the exact information processed due to national-security concerns.
How much is the Palantir contract worth?
Documents obtained by the Investigative Journalism Foundation show that the Department of National Defence contract was initially valued at $14 million and could be worth up to $63 million.
What does the U.S. CLOUD Act allow authorities to do?
Based on statements from international attorney Barry Appleton, the legislation empowers authorities—provided they follow proper legal procedures—to force applicable American enterprises to hand over information under their control, custody, or possession, irrespective of where that data is physically stored.
How should governments balance the need for advanced foreign military software against risks to national sovereignty and data control?