Palantir is preparing to take legal action against London Mayor Sadiq Khan after a proposed £50 million contract between the US technology company and the Metropolitan Police was halted due to procurement concerns.

According to a report by The Guardian, lawyers representing Palantir have informed the Mayor’s Office for Policing and Crime (MOPAC) that the company plans to challenge the decision in court. Khan’s office has confirmed receiving the letter, while Palantir has declined to comment publicly.

The dispute centres on a planned deal that would have seen the Metropolitan Police use Palantir’s software to help process and analyse intelligence gathered during criminal investigations. The technology was expected to automate parts of the analysis process and support police work.

However, the agreement was halted in late May after Khan’s office raised concerns about how the procurement process had been handled. The mayor’s team argued that proper procedures had not been followed before the contract moved forward.

A spokesperson for Khan’s office said, “The Met did not present its procurement strategy as required and the Met only fully engaged with one potential supplier: Palantir,” as quoted by The Guardian.

The spokesperson also rejected suggestions that the decision was influenced by politics or the company’s public image.

They added the decision was not made on the basis of “values or political considerations” but rather the procurement process “did not adequately demonstrate value for money for Londoners”.

The disagreement comes at a time when Palantir is facing increasing scrutiny in the UK. The company, known for its data analytics and intelligence software, has several contracts with government bodies, including the NHS.

Questions around those agreements have grown in recent weeks. The government is currently reviewing the NHS’s £330 million contract with Palantir and considering whether to continue the partnership beyond early 2027 or use an existing break clause to end it.

Palantir CEO Alex Karp recently made headlines for comparing excessive AI use to “porn addiction.” Speaking during a live interview with TBPN at Palantir’s AIPCon 10 event, Karp aimed at “tokenmaxxing”, the growing trend of measuring AI success by token usage and compute consumption rather than actual business impact.

“People are just sitting there all day, kind of like a porn addiction,” he said.