AI Giant Supporting Israel Faces Boycott Threat: Legal Warning Issued
The Islington Council pension fund in London is considering divesting from Palantir shares due to its partnership with the Israeli Ministry of Defense. The organization UK Lawyers for Israel has warned the fund of potential legal repercussions.
The local council pension fund of Islington in London has expressed an intention to divest from Palantir shares due to its partnership with the Israeli Ministry of Defense — and is now facing a legal warning. The organization UK Lawyers for Israel has sent a warning to the fund that the move could constitute a breach of pension regulations and a violation of the law.
This is not yet a lawsuit or a court order, but a legal warning letter sent ahead of the pension committee meeting on September 15. The organization demands that the claims be examined by legal advisors before a decision is made.
Islington is a local authority in north-central London, including, among others, the neighborhoods of Angel and Highbury, home to the Arsenal Football Club. The council, where the Labour Party holds a majority, manages a public pension fund of approximately 2.2 billion pounds for its employees and the employees of dozens of local employers. The fund has about 22,000 employees, retirees, and beneficiaries.
At the center of the affair is Palantir Technologies, one of the world's giants of artificial intelligence and defense technology, whose market value is approaching 480 billion dollars. The company analyzes vast amounts of data for governments, armies, intelligence agencies, and commercial companies.
Palantir has a historical connection to the American intelligence establishment: In-Q-Tel, the investment fund established by the CIA, invested in it early on and helped adapt its products to the needs of intelligence agencies. Palantir is not owned by the CIA, but the agency was one of its first clients.
After the October 7 massacre, Palantir signed a strategic partnership with the Israeli Ministry of Defense to supply technologies for the war effort. CEO Alex Karp expressed clear support for Israel, and the company's board of directors even met in Tel Aviv as a sign of solidarity. This connection made it a target for boycott movements.
The Islington fund holds Palantir shares traded on NASDAQ worth only about 1.4 million pounds — less than 0.07% of its assets. For Palantir, this is a drop in the ocean, and the sale of the shares is not expected to affect the company's stock price. The significance of the move is primarily political and symbolic: creating a precedent that may encourage other public funds to act similarly.
In a survey conducted by the fund, more than 80% of respondents supported the sale of Palantir shares and the exclusion of companies appearing in the UN database due to their activities in the West Bank. The organization UK Lawyers for Israel noted in its warning that only 1,343 out of about 22,000 members — 6.1% — participated.
UK Lawyers for Israel is a non-profit organization that brings together lawyers who support Israel and act through legal tools against boycotts and discrimination. According to the organization, the survey was biased: it highlighted Palantir's work with Israel but downplayed its activities with the armies of the UK and Ukraine. It was further claimed that the low participation rate does not prove broad and informed support and that the decision could harm the returns of the savers.
Unfortunately, the move has precedents: the Norwegian investment manager Storebrand sold Palantir shares worth about 24 million dollars in 2024, and in 2026 the Dutch pension fund ABP sold holdings in the company whose value was previously estimated at about 825 million euros. If Islington proceeds despite the warning, it could become a legal test case for municipal pension funds in the UK.
