Palantir Falls on Army Memo Flagging Security Risks in Battlefield System

Palantir Technologies (PLTR, Financials) shares dropped 5%. Army memo raised concerns about security gaps in a new battlefield communications system developed with Anduril and other contractors.

The system, known as NGC2, is designed to connect soldiers, vehicles, sensors and commanders with real-time data. But a September memo from the Army's chief technology officer described fundamental security flaws, warning the prototype should be considered very high risk for potential undetectable adversary access.

Among the issues, the memo said any authorized user could access all applications and data without restrictions, raising risks of misuse of classified information. It also pointed to unreviewed third-party applications, one of which had 25 high-severity code vulnerabilities.

Palantir responded that its software already holds Impact Level 5 and 6 authorizations and that no vulnerabilities were found in its platform. A spokesperson said security findings during testing were mitigated before field use, noting the first division-level event went ahead without delay.

The Army awarded Anduril a $100 million contract earlier this year to prototype NGC2 with Palantir, Microsoft and other firms. The system was tested in live-fire training at Fort Carson in March, where officials highlighted improved performance over legacy systems.