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Tuesday, Dec 16, 2025
Outside the box.
U.S. Freezes £31 Billion Tech Prosperity Deal With Britain Amid Trade Dispute
Washington puts on hold a landmark technology investment pact with London over unresolved tariffs, digital tax and regulatory disagreements
The United States government has paused implementation of a headline-making £31 billion “Tech Prosperity Deal” with the United Kingdom, casting uncertainty over one of the most significant transatlantic technology partnerships in years.
The agreement, concluded in September during a state visit by the U.S. president, was designed to deepen cooperation in artificial intelligence, quantum computing and other frontier technologies and to unlock vast private investment commitments from major U.S. firms.
Washington’s decision to suspend progress reflects growing frustration in trade talks with London over a series of unresolved disputes, particularly Britain’s digital services tax on U.S. technology companies and long-standing regulatory differences.
The Tech Prosperity Deal was envisioned as part of a broader memorandum of understanding to spur joint innovation across cutting-edge sectors and to strengthen allied leadership in global technology markets.
U.S. technology firms including Microsoft, Google, NVIDIA, OpenAI and CoreWeave had pledged a combined £31 billion in new investment into the U.K.’s AI infrastructure, data centres, quantum research and related fields, with the aim of generating tens of thousands of skilled jobs and boosting commercial collaboration between the two economies.
The pact was also linked to a promise of shared efforts on civil nuclear energy and advanced research programmes.
Despite high-profile endorsements from both governments and industry leaders, the pause has been triggered by Washington’s insistence that London move more decisively to remove trade barriers and align regulatory regimes.
Key sticking points include the U.K.’s digital services tax — a levy on revenue from large technology platforms — which Washington views as discriminatory against American firms, and differences over food safety regulations that have hindered broader trade cooperation.
U.S. officials have tied the effective activation of certain elements of the deal to progress on these issues, a linkage that has stalled negotiations.
British government figures have sought to frame the impasse as part of the give-and-take of hard-nosed diplomatic and trade negotiation, emphasising that core components of the agreement remain intact and that talks will continue in early 2026. Ministers in London have reiterated their commitment to securing the benefits of the tech pact for British communities, companies and universities, even as they defend domestic policy choices such as the digital tax and food standards.
Both sides say they remain committed to maintaining a robust bilateral relationship and are expected to resume discussions on unresolved issues in the new year.
The agreement, concluded in September during a state visit by the U.S. president, was designed to deepen cooperation in artificial intelligence, quantum computing and other frontier technologies and to unlock vast private investment commitments from major U.S. firms.
Washington’s decision to suspend progress reflects growing frustration in trade talks with London over a series of unresolved disputes, particularly Britain’s digital services tax on U.S. technology companies and long-standing regulatory differences.
The Tech Prosperity Deal was envisioned as part of a broader memorandum of understanding to spur joint innovation across cutting-edge sectors and to strengthen allied leadership in global technology markets.
U.S. technology firms including Microsoft, Google, NVIDIA, OpenAI and CoreWeave had pledged a combined £31 billion in new investment into the U.K.’s AI infrastructure, data centres, quantum research and related fields, with the aim of generating tens of thousands of skilled jobs and boosting commercial collaboration between the two economies.
The pact was also linked to a promise of shared efforts on civil nuclear energy and advanced research programmes.
Despite high-profile endorsements from both governments and industry leaders, the pause has been triggered by Washington’s insistence that London move more decisively to remove trade barriers and align regulatory regimes.
Key sticking points include the U.K.’s digital services tax — a levy on revenue from large technology platforms — which Washington views as discriminatory against American firms, and differences over food safety regulations that have hindered broader trade cooperation.
U.S. officials have tied the effective activation of certain elements of the deal to progress on these issues, a linkage that has stalled negotiations.
British government figures have sought to frame the impasse as part of the give-and-take of hard-nosed diplomatic and trade negotiation, emphasising that core components of the agreement remain intact and that talks will continue in early 2026. Ministers in London have reiterated their commitment to securing the benefits of the tech pact for British communities, companies and universities, even as they defend domestic policy choices such as the digital tax and food standards.
Both sides say they remain committed to maintaining a robust bilateral relationship and are expected to resume discussions on unresolved issues in the new year.
