Microsoft, Palantir Team Up to Sell AI to US Defense, Intelligence Agencies

(Bloomberg) — Microsoft Corp. and Palantir Technologies Inc. are combining their government cloud-computing and artificial intelligence tools in a bid to sell software, including OpenAI’s GPT-4, to US defense and intelligence agencies for top-secret tasks.

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As part of the agreement, Palantir will integrate its products with Microsoft’s Azure cloud services for government customers, including tools meant for confidential use, and will adopt Microsoft’s Azure OpenAI service inside these secretive clouds. The combination of products will let US defense workers handle tasks like logistics, contracting and action planning, the two companies said Thursday in a statement.

Microsoft has bolstered demand for its Azure cloud service by selling clients the ability to use OpenAI models, which let businesses develop their own applications that use AI for tasks from customer service to planning and analysis. The company has been adding that capability for government customers who need additional security, and in May, the software giant deployed OpenAI’s GPT-4 to Azure Government Top Secret, its “air-gapped” environment that is isolated from the internet.

Palantir, the Denver-based data-analysis software company co-founded by billionaire tech investor Peter Thiel, has grown from serving the US intelligence community to working with dozens of government agencies in the US and allied countries. The expanded partnership with Redmond, Washington-based Microsoft means Palantir will be able to use Microsoft’s Azure OpenAI in classified environments. For Palantir’s new AI software to work, it needs a large language model.