Palantir Technologies ( PLTR ) shares surged 10% in intraday trading Thursday after the company announced an agreement with Microsoft ( MSFT ) to provide the U.S. government with secure cloud, artificial intelligence (AI) , and analytics capabilities for national security. Microsoft shares also gained.

The companies said the U.S. defense and intelligence community, which includes government organizations like the Central Intelligence Agency (CIA) and military intelligence agencies, will have access to Palantir and Microsoft’s AI and cloud tech for national security missions.

The agreement provides the U.S. government agencies with large language models (LLMs) through Azure OpenAI Services, Microsoft’s cloud offerings through its partnership with OpenAI, and Palantir’s AI Platform (AIP) .

Palantir has existing contracts with the U.S. government, including a contract with the U.S. Army focused on AI and machine learning.

“Bringing Palantir and Microsoft capabilities to our national security apparatus is a step change in how we can support the defense and intelligence communities,” Palantir CTO Shyam Sankar said.

The new government offering could strengthen the relationship between Palantir and Microsoft. The companies didn’t disclose financial terms of the agreement.

Palantir shares were up 10% to $28.96 around 3 p.m. ET Thursday following the news, while Microsoft shares were up close to 1% at $402.12.