International Tech Diplomacy and Inward Investment: The UK’s Global Innovation Courtship

While some ventures have stalled, the UK  government has spent 2025 turning diplomacy into deal flow, with technology at its core. The recent US-UK deal is testament to this.

During President Trump’s state visit, the UK and US unveiled a record £150 billion package of investment, much of it skewed towards technology. Ministers say over 7,600 jobs will stem from these deals across the country. The message to investors is simple. The UK intends to be a leading location for tech companies and technology related infrastructure investments.

The package features familiar giants. Microsoft will spend £22 billion to expand cloud and AI infrastructure as well as investment in ongoing operations. This includes building the country’s largest supercomputer in partnership with Nscale. Nvidia, working with partners including OpenAI and Nscale on a sovereign platform dubbed Stargate UK, is bringing vast compute capacity. Google plans £5 billion anchored by a new data centre at Waltham Cross. Palantir will expand its UK footprint through defence, and AI contracts and Amentum will put £150 million into growing its UK workforce. There were also commitments for closer collaboration on tech related research and development from AI-powered drug discovery through to quantum.

This transatlantic influx reflects a sharp turnaround in sentiment among tech leaders. Just months ago, Nvidia’s chief had warned that the UK risked falling behind in the AI race, now he touts the UK as a future “AI superpower.” Microsoft’s president who once derided the UK as “bad for business” believes it is now an AI hub worthy of that £22 billion bet. According to a recent Barclays survey, 62 per cent of global tech businesses now view the UK as a more attractive growth base than other regions. They point to the country’s deep capital markets, abundant skilled talent, and quick embrace of new technologies.

India Pact Ignites Inflows

The transatlantic surge is only part of the picture, with the UK government also intensifying its outreach to Asia. A landmark agreement with India, signed in July 2025, has strengthened technology ties by reducing tariffs, easing regulatory hurdles and enabling smoother movement of engineers and researchers. The deal sparked a wave of investment commitments from eighteen Indian firms. LTIMindtree is creating 300 new tech jobs in London through a new AI innovation studio, DCube AI has chosen London and Manchester for expansion, and Aurionpro is investing £20 million to establish a UK headquarters with AI-driven R&D labs.

At the same time, a new investment partnership with Japan is paving the way for joint growth in cleantech, biotech and artificial intelligence. Nearly 1,000 Japanese companies already operate in the UK with £87 billion invested.

Closer to home, European ties are warming again too. A pragmatic post-Brexit reset with Brussels is unlocking collaboration in areas like Defence Tech. A new “Entente Technologique” with France has already channelled investment into UK artificial intelligence and cybersecurity efforts. Examples include a partnership in supercomputing led by the Bristol Centre for Supercomputing, a £35 million investment from Comand AI to bring its software to the defence industry and a £40 million investment from Thales focused on AI innovation.

Even the Gulf states have joined the courtship. A revamped partnership with Bahrain will bring around £2 billion in joint investments including in fintech, tech and clean tech while a strategic partnership with Saudi Arabia aims to strengthen collaboration in biotech and healthtech as well as develop educational curriculum to advance AI skills.

What is in it for Real Estate?

The most immediate property impact of this wave of investment is in AI infrastructure, with data centres and supercomputing facilities drawing the largest share of capital and demanding resilient energy supply. The effects, however, extend well beyond these core assets. New European headquarters, AI hubs and specialised R&D facilities are being established, while locations with strong supercomputing and data centre infrastructure could be magnets for further growth. Beyond AI, fresh investment is also flowing into biotech, cleantech, fintech and defence tech, broadening the demand profile across the property landscape.

The arrival of an international tech company can trigger a property multiplier effect, lifting a city’s profile, attracting suppliers and talent, and eventually generating spinouts as employees launch new ventures. Recent trade agreements and economic pacts have already channelled foreign direct investment into cities beyond London, including Leicester, Manchester, Edinburgh, Glasgow, Huddersfield, Cambridge, and Bristol.

Staying Competitive Amid Global Rivalry

For the UK government the task now is to keep this momentum. Other nations are vying to lure the same companies and projects. Securing further foreign corporate investment requires more than diplomacy alone. It hinges on stable regulation, strong skills pipelines, competitive taxation, subsidies and reliable energy costs among other factors.

Delivery will also be key to seeing the full benefits of investments, particularly those in AI infrastructure. Grid capacity, energy pricing and planning delays are well documented challenges.

Finally, while foreign direct investment is welcome, there are concerns that without deliberate policy, UK startups risk becoming suppliers or acquisition targets rather than global competitors in their own right.

The nation has staked a claim as a leading tech hub in part through diplomacy. Fulfilling that promise on the ground, in turn, will ensure that today’s grand announcements become tomorrow’s tangible growth.