President Donald Trump on Saturday abruptly called off the “biggest attacks since World War II” against Iran in favor of negotiations, the latest in a seemingly endless series of whiplashes in the conflict.

The energy markets, which typically favor stability and predictability, responded with little more than a shrug.

Crude prices dipped slightly and gas prices remained steady. Even as the war stretches past the six-month mark and the midterms creep closer, Trump has been able to keep retail prices lower than experts say they should be through the sheer power of promises – which have yet to come through – of a swift end to the conflict. On Monday, he took that a step further, chastising the major oil companies for “making too much money” off global oil shortages as a result of the war.

“They better cut the retail price, the consumer price,” Trump said. “I’ll say it loud and clear. I’m not happy about it.”

But Trump’s ability to jawbone the markets may be diminishing at a critical time, three months before the midterm elections when control of Congress is hanging in the balance and his approval is sinking to new lows amid voter anger over cost of living concerns. It comes as global crude oil supplies are running low, the war threatens more energy flows, refiners are running out of spare capacity and the administration has few tools to keep gas prices low.

“Labor Day is the point where gas prices are baked into the election,” said Republican pollster Frank Luntz. “That last summer trip determines how voters evaluate their cost of living.”

And the higher gas prices come at a time when Trump repeatedly promises to escalate the war and then says it’s almost over a few hours or days later. That is starting to degrade his ability to cause price drops, a former adviser cautioned.

“His credibility has been a little bit shot,” said a former Trump adviser close to the White House, granted anonymity to avoid reprisal.

“The markets aren’t paying attention to him, they’re paying attention to what’s happening and, with respect to oil prices, it is a huge liability for the Republicans,” the adviser said.

Trump on Monday acknowledged that dynamic but expressed no urgency. He told reporters in the Oval Office that he was in no rush to end the conflict, though he acknowledged the need to fully reopen the Strait of Hormuz, through which about 20 percent of global energy supplies flowed before the war. He hinted at the midterm stakes for his party if the conflict does not end soon.

“I’m under no time constraint,” he said. “I don’t happen to be running, but a lot of very good Republicans are running.”

Trump’s ability to move the markets may be the only tool the administration has left to keep gas prices in check, said Rory Johnston, an oil market researcher and founder of the Commodity Context newsletter.

The Trump administration has drawn down the U.S. Petroleum Reserve to its lowest level since President Ronald Reagan’s first term. Oil majors are warning that the lack of refinery capacity could keep prices high for the foreseeable future.

“The market is so entrenched on this idea that eventually this will resolve by Trump deciding and ceding some ground on some issue, likely kind of even symbolic control of the Strait of Hormuz,” he said. “So the market’s going to be constantly watching for any sign that he’s shifting there.”

While experts continue to marvel at Trump’s ability to get the markets to bend to his whims, there is little consensus on when that power will dissipate.

Trump has “less credibility” in terms of moving markets, but it has not totally dissipated, Patrick de Haan, head of petroleum analysis at pricing service GasBuddy.

“I don’t think credibility completely goes to zero,” he said. “Hard to know though when it really bends.”

Trump’s push to keep energy prices low has also been buoyed by reduced Chinese oil imports, the successful rerouting of about 7 million barrels per day of Saudi Arabian crude through the Red Sea and releases from strategic petroleum reserves.

The administration released nearly 3 million barrels of oil from the Strategic Petroleum Reserve last week, bringing the reserves down to their lowest level since February 1983, according to Department of Energy data. About half of the 218.5 million barrels the Department of Energy said it would make available to the market have now left the salt caverns along the Gulf Coast.

As the summer driving season winds down, consumers expect gas prices to fall as well.

If the national average price of a gallon of gas is still above $4 by Saturday, de Haan noted, it will set a new record for the latest in the calendar year that prices are so high.

Ben Lefebvre contributed to this report.

BRUSSELS — When French and German security chiefs announced plans last month to develop a “European sovereign digital backbone,” tech and defense industry insiders on both sides of the Atlantic knew what they really meant: Adieu Palantir.  

Across Europe, the hunt is on for alternatives to the U.S.-based data analytics company that a growing number of government officials believe is too deeply lodged in some of the most sensitive areas of government, from local policing and global intelligence to national defense and health systems. 

Yet it is precisely Palantir’s crucial functions in daily workflows, and its largely unmatched data expertise, that will make it extremely hard for Europe to cut it off in pursuit of greater digital sovereignty. 

“Let’s be honest, Palantir’s product is very good and addictive, it’s pretty much like the sugar in Coca-Cola,” said French digital sovereignty advocate, Philippe Latombe. “Palantir can treat massive amounts of data with great precision and with their experience, they had time to improve their algorithms with many clients and adapt them to many use cases.” 

Still, the drive to break free from Palantir is sweeping across the continent, from Madrid, where the government of Pedro Sánchez has instructed state-backed companies to block Palantir from future public procurement contracts, to France’s domestic intelligence services (DGSI) selecting French company ChapsVision over Palantir. In Britain, the next test may come in February 2027, when the new Labour government of Andy Burnham will face a choice of whether to cut off Palantir’s £330 million National Health Service Federated Data Platform contract. 

Last month’s decision by the French and German intelligence agencies to choose ChapsVision was a double-blow for Palantir’s leadership. CEO Alex Karp showed little patience for the sudden turn away from his company’s wares, declaring that he wasn’t worried about European competitors. “We have a model of what doesn’t work,” he quipped last week on Fox Business. “It’s called Europe.” 

Olivier Dellenbach, ChapsVision’s chief executive, told POLITICO that his company has benefited from what he calls a “visceral rejection of Palantir” in Europe.  

But he also cautioned that he did not want ChapsVision reduced to an anti-Palantir way out. Digital sovereignty, he argues, will remain an empty phrase unless governments turn it into industrial policy. “We need more public procurement,” Dellenbach said. 

Belgium, Germany, Luxembourg, Romania, the Netherlands and Canada have already shown interest in the French Army’s Artemis AI, according to Patrick Moreau, one of the architects of the solution built by French aerospace and defense company Thales. 

“They all want to be able to choose a sovereign solution that is compatible with NATO standards,” he said. “Unlike Palantir’s black box.” 

But for now, even officials who want sovereign alternatives acknowledge that Europe’s replacement market remains fragmented and European companies are yet to match Palantir’s scale and track record.

Admiral Pierre Vandier, NATO’s supreme allied commander transformation, recently told POLITICO the alliance has no viable alternative to Palantir’s battlefield AI technology.  

Another NATO official, granted anonymity to speak frankly, said that Palantir’s system has an unmatched capacity to sift through mountains of satellite imagery to help identify a target, advise on the weapon to strike it, inform how much ammunition is required — and automatically put in an order to replenish the stock. 

“As far as I know, today there is no real competitor for Palantir,” Vandier said in May. 

Freedom or democracy? 

Co-founded by Karp and billionaire investor Peter Thiel, Palantir built its reputation inside the U.S. national security apparatus. Today, the company has a market capitalization of $330 billion.

Thiel has been one of Silicon Valley’s most prominent supporters of U.S. President Donald Trump, while the company’s work with U.S. Immigration and Customs Enforcement (ICE) and the Israeli military has come in for criticism from Amnesty International and others for alleged human rights violations. Adding to unease about Palantir’s ideology-driven business were recent revelations of Thiel’s secretive Dialog society, an invitation-only ideas club for the global elite, and Karp’s manifesto arguing that Palantir is the democratic West’s best hope to stay ahead of authoritarian rivals.

“Peter Thiel explains that the defense of freedom does not necessarily require democracy,” French member of Parliament Aurélien Saintoul, who wrote a report on foreign military dependencies, told POLITICO. “He is clearly putting technical means to serve his political project, and we are talking about technofascists here.” 

A Palantir spokesperson who declined to be named dismissed such accusations as “ludicrous,” noting that similar characterizations about the company have been made recently by the Russian foreign ministry.

“We know what side we’re on, and who we’re standing with,” the spokesman said, citing ongoing work to support the Ukrainian military. “Since our inception, protecting privacy and civil liberties has served as the foundation for how we conduct our work across both public and private sector institutions. Western politicians should think hard about who the real enemy is and not allow themselves to be ventriloquized by the Kremlin.”

Many of the company’s European critics maintain that the Palantir question is much more about tech sovereignty than political ideology. Extracting the company from some of the most delicate corners of European security structures would offer a blueprint for claiming more technological independence.

Instead, if governments in Europe cannot wean themselves off a company that provides software solutions, it would reveal how unrealistic hopes are to reduce dependence on U.S. technology giants that provide cloud infrastructure and hardware.

There is also the uncomfortable reality that at the same time that political leaders are calling for a break from Palantir, Europe’s biggest banks and asset managers have dramatically increased their investments in the U.S. company over the past year as it positions itself to profit from the AI gold rush, reports investigative outlet Follow the Money.

From crisis tool to critical infrastructure

Palantir’s European foothold was built long before the current boom in AI. A hallmark of its growth was that it never wasted a crisis to demonstrate its value for governments in need.  

In France, for instance, Palantir arrived in the aftermath of the November 2015 Paris terrorist attacks as security services scrambled to respond to a fervent public backlash on how they could have allowed such a tragedy to happen. The domestic intelligence agency signed a contract with the data analytics giant in 2016. 

A similar pattern played out in Germany, where Palantir’s first major deployment came in Frankfurt, in the central state of Hesse, where police purchased Palantir’s Gotham in 2017 and deployed it under the name hessenDATA. It proved to be a crucial tool for officers to turn sprawling information into leads to help solve crimes.

Germany remains deeply divided over whether to use Palantir’s software. At the national level, Interior Minister Alexander Dobrindt has pushed to expand the use of Palantir and introduced legislation that could pave the way for broader federal use. But the move has run into opposition from coalition partners the Social Democrats, as well as senior security officials.

The same crisis-to-contract pattern appeared in the U.K. during the Covid-19 pandemic. Palantir’s relationship with the National Health Service (NHS) began when it was paid a nominal £1 fee to help aggregate data during the crisis, according to Palantir’s U.K. lead Louis Mosley. 

Europol, the EU’s police agency, used Palantir’s Gotham platform from 2016 to 2021 before ultimately dropping it. For one Europol official who was granted anonymity to discuss the matter freely, the problem with Palantir is less ideological than practical. Yes, the platform is expensive, raises sovereignty concerns and leaves clients dependent on Palantir for updates, the official said. But the more basic question is whether every agency needs the full Palantir machine. 

“[Palantir] is really good when you have massive amounts of data and want to connect everything,” they said. “But that is not the case for us. In many cases, the alternatives are close enough. If we used it, I’m not sure our efficiency would increase dramatically.” 

Part of Palantir’s approach in Europe is to hire former officials from the institutions it wants as customers. OpenDemocracy reported that Palantir hired four former officials from the U.K.’s Ministry of Defence before winning a £240 million MoD contract.

The influence drive 

Moreover, Palantir is now seeking new business on the continent in defense.

On Jul. 1, Palantir’s Maven Smart System — which was first used by the Pentagon — became fully operational at NATO, meaning it’s been given security clearance to operate on the classified network. According to a NATO statement, the platform links command-and-control systems across the Alliance. 

“I think this is a very important milestone for European defense,” said Palantir’s U.K. chief Louis Mosley. 

But Palantir’s grip on Europe does not stop at the doors of government or army barracks. It also runs through some of the continent’s industrial crown jewels. Airbus signed with Palantir in 2015, making Palantir’s Foundry the backbone of its aviation data platform. Automaker BMW, energy company British Petroleum and media publisher Axel Springer — POLITICO’s parent company — all use Foundry to improve their business productivity as well. 

Looking for alternatives 

Even if Europe manages to loosen Palantir’s grip, the company’s model built on top of the latest AI large-language systems appears to only be getting stronger. On Jun. 30, Amazon Web Services said it would invest $1 billion in a new “Forward Deployed Engineering” organization, embedding teams of engineers inside customer headquarters to build AI systems alongside them.  

Days later, Microsoft announced a $2.5 billion push to send 6,000 engineers and industry specialists into client organizations. Both initiatives echo Palantir’s pioneering model to not simply sell software but put engineers inside a buyer’s operation. 

Both the strength of its products and the sensitive areas where they’re applied, make Palantir Europe’s sovereign test case par excellence. If governments and companies can replace a software layer that helps turn data into decisions, they may have a blueprint for clawing back some digital sovereignty. If they cannot, the next generation of AI tools from U.S. tech giants may prove even harder to quit. 

“Europe’s public institutions cannot become dependent on software built by a small circle of U.S. tech billionaires with an obscure political worldview,” said German Green MEP Hannah Neumann, who sits on Parliament’s defense committee. “It would be like outsourcing part of the democratic state to a private intelligence service that answers neither to voters nor to parliament.”

David Pargamin contributed reporting from Paris.