Downing Street says Britain remains “actively engaged with US counterparts at all levels of government” about a broad technology deal.
The BBC understands the conversations about the Technology Prosperity Agreement have stalled because of US concerns about what they see as broader British trade barriers.
The partnership, which was labeled “historic” when unveiled during US President Donald Trump’s state visit in September, saw both countries pledge to further collaborate in areas such as AI and quantum computing.
“We are confident we can reach a deal that will shape the future of millions of people on both sides of the Atlantic,” the Prime Minister’s official spokesperson said.
He said he would not comment directly on what were “live” discussions, but added that “these types of negotiations are never easy.”
The New York Times – which first reported the story – said there were “broader differences” between the two sides, including over digital regulation and food safety rules.
The British government has not commented on these specific claims. The White House did not respond to the BBC’s request for comment.
When the deal was announced, the government was keen to highlight the benefits it said it would deliver.
“This Tech Prosperity Deal marks a generational change in our relationship with the US,” the Prime Minister said Sir Keir Starmer said in a statement.
Technology Secretary Liz Kendall said the partnership would “transform lives across Britain” and be a “vote of confidence in the UK’s thriving AI sector”.
At the same time the deal was announced, a series of US tech companies announced a wave of investment in Britain.
A total of £31 billion in planned spending was set out by tech giants including Microsoft, Nvidia and Google.
It is assumed that these investment plans remain unaffected.
Google, Microsoft and Nvidia have also been contacted for comment, but the companies have not yet responded to the BBC.
Nvidia boss Jensen Huang said in September His company’s British investment reflected his belief that it could become an ‘AI superpower’ – an ambition championed by Sir Keir’s government.
It said the investments announced by tech companies alongside the Tech Prosperity Deal would be used to scale up AI infrastructure, such as data centers, across the UK.
The technology pact was documented in a Memorandum of understanding (MOU), which stated that both countries would seek to collaborate in the areas of AI, quantum computing and nuclear energy.
It said this could include working together to build “powerful quantum machines”, supporting innovation in AI hardware and exploring potential new ways to use advanced nuclear energy.
But the MOU also states that any proposals are non-binding and that it will not become effective until substantial progress is made in formalizing and implementing the broader Economic Prosperity Agreement between the US and Britain, which was signed in May.
The Trump administration has sought to rewrite global trade rules, imposing tariffs on many countries – including traditional allies like Britain – and seeking new deals that it says are fairer to the US.
For Britain, this meant negotiating different sectors of the economy, a process that produced agreements cars and more recently, pharmaceutical products.
However, a proposed deal to remove tariffs on British steel exports to the US has been put on hold indefinitely, the BBC understands.
Allie Renison, director of communications firm SEC Newgate UK and a former government trade adviser, said the current impasse over technology reflected the “somewhat piecemeal approach” of the US and Britain to striking trade deals.
“Instead of doing everything at once, different areas are being linked to different parts,” she told the BBC, noting how concerns over separate trade areas could now impact technology deals.
While questions lingered about what the potential roadblocks could mean for US tech companies’ committed investments in Britain, Renison added, it was unlikely that this would amount to little more than “a bit of posturing in the wider negotiations”.
Additional reporting by Michael Race and Philippa Wain
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