The UK's largest private pension scheme is facing calls to divest from Palantir, the controversial US surveillance and defence technology company, following a Nerve investigation that revealed it held £45m worth of shares.
Senior lecturers and academics have told the Nerve that the company’s products are “inherently dangerous” and that they were shocked to discover their own pensions were invested in a firm whose products are being used in the US military’s war on Iran.
The Nerve’s investigation revealed that the Universities Superannuation Scheme (USS), which manages pension funds on behalf of more than half a million professors, lecturers and university staff across the country, has a £45m stake in the company co-founded by tech billionaire Peter Thiel.
When we put this discovery to Jo Grady, general secretary of the University and College Union (UCU), she called on the fund to divest, saying USS – which manages £73bn for 577,000 university staff – should “look again” at its £45m stake in the firm.
Jo Grady, General Secretary of the University and College Union, talks at a rally by striking college staff at The Emmanuel Centre on January 16, 2026 in London, England. Staff at colleges across England who are members of the Universities and College Union (UCU) are striking over pay. Photo: Leon Neal / Getty Images
Last month, as part of an investigation led by Dutch news outlet Follow the Money and other European publishers, the Nerve revealed how UK funds and banks have more than £5bn invested in Palantir and have increased their holdings by 16m shares over the past year.
The increase came despite mounting concerns about the firm’s close ties to Donald Trump via Thiel, its contentious work for Immigration and Customs Enforcement (ICE) in the US, its provision of targeting software to the US military in the Middle East, and the pronouncements of its co-founder Alex Karp, who told shareholders in 2024 that Palantir's products "bring violence and death to our enemies".
In the UK last month, science minister Patrick Vallance told MPs that there would be a rethink on Palantir NHS contracts, with an emphasis on using British firms. This week, the Times reported that ministers were considering triggering break clauses in Palantir’s contract with the NHS due to its work for the US government. Louis Mosley of Palantir UK claimed ministers appeared to be capitulating to “ideologically motivated campaigners”.
The political pressure on Palantir's UK contracts comes in tandem with scrutiny of its presence in British pension portfolios. Grady said: “Palantir has just recorded bumper profits by acting as ICE's digital enforcers and helping Trump deport record numbers of migrants. It was founded by Peter Thiel, a man who has said women getting the vote was bad for democracy, and is led by a CEO who boasts his technology will destroy jobs in the humanities.
“University staff will rightly be shocked to learn their pension fund is investing their savings in such a controversial company. USS needs to consider its commitments to responsible investments and look again at where it is putting member money."
The revelations about the union’s shareholding in Palantir come in spite of a range of “responsible investment" guidelines that the fund boasts about. USS details four themes for responsible investment in its Stewardship Report for 2025, one of which is “People”, and notes that it joined the Investor Alliance for Human Rights last year specifically to support that theme. The fund’s guidelines exclude companies which “violate human and labour rights” and its stewardship statement says: “We don't just buy an asset and leave it on our books … We exercise ownership rights and engage with our assets as an active, long-term owner."
We need to start seeing these AI companies a bit like arms manufacturers
Professor Iain Clacher, a pensions finance specialist at the University of Leeds, said the rise of AI companies that operate across surveillance, defence and public services had made ethical investment decisions far more complex for trustees than the traditional exclusion of tobacco or gambling stocks: "There is essentially a new and more complicated type of firm that has emerged and trustees will need to move quickly to ensure their investment ethos and their actual investments still align."
Tara Van Ho, associate professor of law at St Mary’s University, Texas, and an expert in corporate human rights due diligence, said: “The product is an inherently dangerous one, and the process for due diligence here should be similar to what an investor does with cluster munitions or other arms. Palantir’s technology has been linked to widespread and systematic violations of human rights and humanitarian law.”
Under the OECD Guidelines for Multinational Enterprises, to which the UK is a signatory, institutional investors are expected to conduct human rights due diligence on their holdings. But Van Ho added that USS's obligation was not due to its endorsement of guidelines. “It’s a responsibility on all businesses, including investors, and stems from international law. Membership of the alliance is also not a substitute for doing their own human rights due diligence.”
Other experts share concerns about whether USS's commitments reflect actual practice. Dr Anil Yilmaz Vastardis, senior lecturer at Essex Law School and Human Rights Centre, said that funds signing up to these schemes often treat them as an exercise in “rightswashing”: “We are seeing a lot of companies signing up to standards, signing up to programmes, but not necessarily doing the work ... it's probably true that there's a level to which it's rightswashing."
Yilmaz Vastardis said institutional investors needed to fundamentally rethink how they categorise firms such as Palantir. "We need to start seeing these AI companies a bit like arms manufacturers. Their products are potentially inherently dangerous. Institutional investors need to identify how their business is connected to the activities – and if they can't influence the behaviour of their investee companies, they need to think about an exit strategy."
We asked Palantir to respond to these views but they did not respond.
The Nerve put specific questions to USS: whether its Investor Alliance membership had prompted any human rights assessment of the Palantir holding; and whether the same logic it had applied to votes against ExxonMobil directors and to its treatment of cluster munitions companies would apply to Palantir. USS declined to answer the questions, saying only that it assumed the Nerve's figures were “consistent with the holdings and information we disclose on our website” and that “we are unable to provide any additional information or comment”
Van Ho said the fund's refusal to answer questions about its holding was not surprising. “I say this as someone who has a pension with USS: USS’s failings in this area are not new.” She added that she believed “they only ever act beyond financial considerations when their members take sustained action to make it happen. They have never shown themselves to be proactive or truly responsible investors, in my opinion.”
Yilmaz Vastardis said USS members were not without recourse: UCU, which has three nominees on the USS trustee board, could use that position to demand a formal response. Alternatively, any USS member – or the union itself – could bring a complaint to the UK's OECD National Contact Point, a government mechanism that has rarely been used against institutional investors. “I'd be interested to see someone bringing an OECD national contact point complaint against one of these,” she said. “It will be interesting to see if that can be tried, at least.”