US AI giant Perplexity has struck a deal with London-based startup Valarian to bring its technology into the UK government and defence systems, a major boost to Britain’s ambition to reduce its reliance on foreign tech infrastructure.

The partnership will let governments and businesses handling sensitive information deploy Perplexity’s AI within their own infrastructure, keeping control over where data is processed and how the technology operates.

Valarian, which raised $50m (£37m) in July, has developed software that allows organisations to control which AI models can access their systems, what information they can use, and where individual workloads run.

The deal marks a significant commercial win for the British startup, whose technology is now deployed across four continents, as governments increasingly seek to harness advanced AI without surrendering control of critical infrastructure.

AI minister Kanishka Narayan welcomed the agreement as an endorsement of Britain’s domestic technology capabilities. “When one of the world’s leading AI companies needs to deliver sovereignty to enterprise and government, it is choosing a British company to do it”, he said.

“That is a powerful signal of the role British firms – like Valarian – will play in the sovereign AI stack”.

The minister added that Britain’s public sector and critical industries needed to harness AI “without handing over control of how and where it operates”.

Britain’s sovereign AI ambitions

The partnership comes amid mounting concerns over the UK’s dependence on American Big Tech, which dominates the advanced AI models and cloud infrastructure used by UK PLC.

Just this week, the government’s top science advisory body warned that Britain risked becoming a “high-value AI customer” rather than developing its own technology, unless ministers urgently strengthened domestic capabilities.

“Organisations must secure and maintain control of their own data – by retaining the ability to track where it goes, how it is used, and who it is used by”, Valarian founder and chief executive Max Buchan told City AM.

“Without that control, organisations risk becoming dependent on infrastructure they don’t ultimately govern or using AI systems that could leak their intellectual property”.

Under the agreement, organisations could use externally hosted AI for general research while keeping more sensitive workloads within isolated infrastructure under their own control.

“We shouldn’t just be competing with Silicon Valley – we should be leading it”, Buchan told City AM.

“But true sovereignty is about more than where a company is based”.

Perplexity, which has more than 45m users globally, said the partnership would help it reach customers in sectors where data security had previously constrained adoption.

“For many of them, the usefulness of AI was settled a long time ago”, said Nate Kupp, the company’s vice-president of engineering for enterprise and infrastructure.

“What’s held them back is where it runs and who controls it,” he added.

The agreement follows Valarian’s $50m Series A funding round, led by US venture capital firm New Enterprise Associates, which brought its total funding to $70m. It also comes as the government pushes ahead with its £500m Sovereign AI Fund, amid calls from industry executives for more than £20bn in investment over five years.