British and European businesses risk falling behind their global rival within five years unless they rapidly accelerate their AI adoption, the UK boss of Palantir has warned.

Louis Mosley, chief executive of Palantir UK, said major European companies were falling behind their American rivals, which are already seeing significant commercial benefits from deploying AI across their operations.

His warning comes after the US software giant reported a 148 per cent surge in American commercial revenue in the third quarter, as businesses ramped up spending on its AI technology.

“What we’re seeing in the US, that 148 per cent year-on-year revenue growth in corporates, is blue-chip American companies adopting AI and deriving value from it”, Mosley said.

“Go to the rest of the world – you’re not seeing that growth rate”.

He warned that European businesses risked losing ground to US competitors if they failed to move quickly.

“If their peer competitors on the other side of the Atlantic don’t start to catch up and enter that race, fast forward four or five years, there’s going to be a huge divergence and they’re no longer going to be competitive”.

Europe struggles to keep pace

The warning comes as Britain and Europe grapple with how to compete in an AI industry increasingly dominated by American and Chinese companies.

While the US has produced leading AI developers including OpenAI, Anthropic and Google, European policymakers have increasingly shifted their attention towards encouraging businesses to adopt the technology rather than competing to develop the most powerful models.

European Commission president Ursula von der Leyen recently argued that Europe did not necessarily need to develop frontier AI itself to capture the technology’s economic benefits.

However, Eurostat figures show that just one in five European businesses used AI last year, with smaller companies particularly slow to embrace the technology.

In Britain, research by Oliver Wyman and UK Finance found that while more than 90 per cent of financial services firms had deployed predictive AI, nearly 70 per cent remained in the pilot stage for generative AI.

The UK government has committed £500m to a Sovereign AI Fund and pledged to expand domestic computing infrastructure, although concerns remain over Britain’s reliance on overseas technology providers.

In July, MPs warned that the UK lacked a coherent strategy for securing critical technologies, leaving it vulnerable to having access restricted by foreign partners.

Palantir profits from US AI boom

Mosley’s warning followed another bumper quarter for Palantir, whose software is used by governments and major corporations to analyse data and deploy AI across their operations.

The company reported third-quarter revenue of $2.31bn, up 96 per cent year on year and ahead of Wall Street expectations of $2.18bn.

Its US commercial business grew 148 per cent to $984m, overtaking its American government business for the first time.

Palantir also secured 212 deals worth $2.9bn during the quarter, including 64 contracts valued at $10m or more.

The company raised its full-year revenue forecast to approximately $8.53bn, up from its previous guidance of around $8.15bn.

Chief executive Alex Karp also warned that China’s rapid progress in artificial intelligence made American technological leadership increasingly important.

“I happen to respect their culture quite a bit, China, but it is us or them”, Karp told analysts on Monday. “We’ve got to make sure we’re the leaders”.

Karp called for closer cooperation with European allies and urged governments to rethink how they regulate AI as competition heats up.