Palantir and London Mayor Sadiq Khan's office have settled Palantir's lawsuit over a decision to block a £50m ($66m) contract with the Metropolitan Police.
Palantir was suing Mopac, which is part of the mayor's office, over its decision to block the Met from agreeing to a two-year deal with the firm to provide artificial intelligence technology to automate intelligence analysis in criminal investigations.
Both sides have now withdrawn their allegations against each other, Palantir and the Mayor's Office for Policing and Crime (Mopac) said in a joint statement on Wednesday.
A trial had been expected in January.
The statement said that Mopac "does not have, and has never had, any policy of not contracting with Palantir".
In June, Palantir filed a legal claim against Mopac at the High Court with lawyers for the company claiming in court documents that the body introduced an "unlawful veto" by wrongly considering the firm's "values and ethics" when deciding to block the contract.
However, the joint statement on Wednesday said Mopac's decision to block the Palantir contract was "not based on Palantir's values or ethics or any wider reporting about the company".
It added: "Mopac recognises Palantir's concerns that media reporting of a statement from the mayor's spokesperson before the decision was taken could have incorrectly created the impression that an assessment of the company's values had been a factor in that decision."
Palantir is still involved in the bidding process for a contract with the Met, which is set to be decided in the spring.
Blocking the contract earlier this year, Mopac said Palantir was the only supplier the Met had seriously considered for the proposed contract.
Mayor of London Sir Sadiq Khan said: "London is the technology capital of Europe, and I am proud that leading software firms choose the city as their home.
"Palantir makes a significant contribution to jobs and investment in the capital, employing a large number of Londoners whose services have been procured legally by organisations across the UK and beyond."
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In June, Metropolitan Police Commissioner Sir Mark Rowley said his force followed procedures that were “legally and commercially compliant”, and services and staff might have to be cut after the contract was blocked.
He told the London Policing Board that Palantir's system would have allowed the Met to cut 500 jobs to help close a budget shortfall of £100m this year and £125m next year.
(c) Sky News 2026: Tech giant Palantir and Sadiq Khan settle legal battle over police contract
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