Is US tech giant deal turning the UK into a vassal state?

US tech companies and private equity firms plan to invest at least $200 billion in the UK. Jobs will be created and money will be made. But some experts say the agreements, announced during US President Donald Trump’s visit, aren’t necessarily a good omen for the British economy.

The pledge from US tech firms to invest billions of dollars in the UK certainly seems very impressive. Microsoft alone has announced a $30 billion spending package, its largest ever outside the US.

Nvidia, the world’s king of chipmaking, and the ChatGPT developer OpenAI are also preparing to “chip in” billions. Nvidia’s co-founder and CEO Jensen Huang even predicted that “the UK is going to be an AI superpower.”

But critics argued that the tech deal actually does little to support the UK’s homegrown tech industry. They also ask what concessions London might give US tech giants – most of which are now closely aligned with the goals of the Trump administration – on regulation and tax.

“Britain’s overreliance on hyperscalers represents a dangerously short-sighted approach to digital sovereignty. At a time when governments should be reducing their dependence on foreign-owned tech giants, the UK appears to be doubling down,” Gustaf Sahlman, CEO of Swedish tech company Curity, told Cybernews.

“Entrusting core cloud infrastructure and AI capabilities to US hyperscalers – many of whom are increasingly politicized – raises serious questions about future control, resilience, and accountability.”

When the CLOUD Act and GDPR collide

According to Sahlman, digital infrastructure is no longer immune to geopolitical tensions, and the UK risks locking itself into systems “it can neither fully control nor easily disentangle from.”

Indeed, even the current discussions over the future of TikTok demonstrate that the lines between Silicon Valley and Washington are swiftly dissolving.

The process isn’t exactly new: before finishing work at the White House, former US President Joe Biden warned about the new gilded age of “robber barons” holding “extreme wealth, power, and influence.”

“US tech firms are aligning themselves with a domestic industrial strategy that treats cloud, AI, and digital infrastructure as tools of geopolitical power. For Europe, the implications are becoming harder to ignore,” said Sahlman.

Already today, the majority of government services, healthcare systems, and private sector infrastructure run on platforms controlled by the big three – Microsoft, Amazon Web Services (AWS), and Google.

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To Sahlman, that’s very risky because cloud infrastructure is now critical infrastructure, and because the US CLOUD Act allows American law enforcement to access electronic data stored by US companies, regardless of where the data is stored, even if it's outside the US.

“At least that’s how I read the document,” he says, although in all fairness, the US companies themselves have at separate times issued specific explanations that the CLOUD Act does not give the US government automatic access to data, including that stored in the cloud.

“I don’t think it makes sense to put your data within a service where you’re not in control of it and where someone may shut you down with a kill switch if you don’t comply with some regulations or you happen to provoke some powerful people.”

Gustaf Sahlman.

Still, European citizens and businesses are facing a curious contradiction: their data is simultaneously subject to local privacy laws like the GDPR and the UK GDPR, and to foreign laws like the CLOUD Act.

“This is a major risk. When the US laws collide with, for example, the GDPR, what has precedence? That’s a mess, potentially,” Sahlman told Cybernews.

“I don’t think it makes sense to put your data within a service where you’re not in control of it and where someone may shut you down with a kill switch if you don’t comply with some regulations or you happen to provoke some powerful people.”

Moving away from American systems

Nick Clegg, the UK’s former deputy prime minister, is even more worried and doesn’t mince his words. As Meta’s former president of global affairs, he seems like a freed man finally able to speak up against big tech.

Speaking at a Royal Television Society conference last week, Clegg said the relationship between the UK and the US tech sector was “all one-way traffic,” and the latest announcements suited the companies.

According to Clegg, Britain was bizarrely fostering a greater reliance on the Americans rather than building its own tech sector.

“We’re a kind of vassal state technologically, we really are. The moment our companies, our tech companies, start developing any scale or ambition, they have to go to California, because we don’t have the growth capital here,” said Clegg, calling the US-UK tech deal “sloppy seconds from Silicon Valley.”

Indeed, while the political narrative is that the UK is becoming an ultra-modern global hub for all things AI, will the prosperity it generates be shared among the public, or will the US private firms hold the levers of power?

“Whose AI future do we want? A future of public benefit, built on transparency, oversight, and verifiable outcomes? Or one where private corporations define what counts as truth?” Simon Thorne, senior lecturer in Computing and Information Systems at the Cardiff Metropolitan University, recently asked.

In Germany, government agencies have started phasing out Microsoft Teams in favor of domestic tools, and Denmark is migrating to Linux.

“The fanfare of investment cannot answer this. Only governance, accountability, and sovereignty can. Without them, the AI future being built in the UK may not belong to its citizens at all, but to the corporations and governments who claim to speak on their behalf.”

That’s, of course, grand politics. Sahlman also thinks about individual businesses that might be “tied to proprietary ecosystems with limited portability, unable to move or replicate workloads across providers without significant cost or risk.”

“We should definitely see beyond the political dimension and think about building resilient businesses. It’s all about sovereignty: you need to be agile as a business and be able to control your data,” Sahlman told Cybernews.

Importantly, other European countries are already beginning to act. France has been investing in domestic cloud initiatives and has actually warned of “digital predators” undermining European autonomy.

In Germany, government agencies have started phasing out Microsoft Teams in favor of domestic tools, and Denmark is dumping Windows and Microsoft 365 and migrating to open-source Linux systems.

“For too long, Europe’s digital future has been outsourced. Now, there is a growing realization that true independence requires owning the stack,” Sahlman said.

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