The UK and US start tech deal talks again after pledges were dropped

The UK and the US have started talks again on the Tech Prosperity Deal, an agreement on AI, nuclear energy and quantum technology. The Financial Times reported this in February. The deal had £31 billion of investment from Microsoft, Nvidia, OpenAI, Google and CoreWeave. The source says the investment pledges linked to the deal are abandoned.

What is at stake

The US wants the UK to remove its Digital Services Tax. This is a 2% tax on the UK revenue of large online firms. The US also dislikes the Online Safety Act, a UK law that Ofcom, the UK media regulator, enforces. The US threatens 100% tariffs on countries that add digital taxes.

What the UK can give

The new Prime Minister, Andy Burnham, said that the government will make tech rules stronger. In August, reports said the government will discuss the tax. Politico reported that a global solution will replace the tax, not a full cut. Civil society groups tell the government not to agree.

What is not known

The source gives no date for a new agreement. It does not give the benefit to the UK from the deal. Public opinion opposes the data centers that the deal needs.

Insight: The UK gives more and the US sets the price

The UK minister for AI says the UK again gets new AI models from OpenAI, Anthropic and Google DeepMind before release. The deal pledges are abandoned, and the tax and online safety rules are the open items. This looks like a deal where the UK gave access and can give rules next, while the US holds the tariff threat. UK rules on tax and online safety can change.