On 18 September 2025, UK Prime Minister Sir Keir Starmer and US President Donald Trump signed the UK-US Tech Prosperity Deal[1], a landmark initiative designed to deepen bilateral cooperation across frontier technologies. For organisations operating in the aviation, aerospace and defence (AAD) sectors, this deal marks a strategic turning point, with implications for trade, innovation, and operational resilience across both sides of the Atlantic.

In this article, we review the deal and its surrounding frameworks to help organisations understand what it means for their business, and what they should be doing now.

Defence innovation and strategic growth

The Tech Prosperity Deal complements the UK’s Defence Industrial Strategy 2025[2], which positions defence as a driver of national growth and innovation. Key highlights for defence organisations include:

Sovereign cloud infrastructure

The UK Ministry of Defence’s £400 million partnership with Google Cloud framed within the deal will deliver secure hyperscale cloud capabilities, forming a key part of the UK Government's digital upgrade and National AI Strategy Plan. The partnership will allow:

  • Defence intelligence and national security specialists to securely share sensitive information across allied networks, helping the UK and US outpace adversaries in an increasingly complex threat landscape.
  • Economic growth as Google Cloud has committed to recruiting a dedicated UK-based team to manage the technology, bringing millions of pounds in inward investment and supporting highly skilled jobs across the country.

During the signing of the deal, US President Donald Trump was accompanied by leading tech CEOs from Microsoft, Nvidia, Google, and others, who pledged £31 billion for major AI supercomputing initiatives, including new data centres. This unprecedented investment will accelerate AI research and infrastructure across both nations.

AI, quantum and fusion acceleration

The deal commits both governments to joint R&D programmes, shared compute infrastructure, and standardisation efforts in:

  • Artificial intelligence: Including AI-for-health, defence applications, and metrology.
  • Quantum technologies: Sensing, computing, and secure communications.
  • Fusion and civil nuclear: Streamlined licensing and coordinated supply chains for advanced reactors.

International collaboration and ecosystem development

The deal supports broader UK efforts to deepen defence tech cooperation with allies and enables:

  • Real-time data integration across allied networks.
  • Joint capability development with strategic partners.
  • Innovation financing through venture capital and dual-use platforms.

Further, the joint partnership plans to establish a ministerial-level working group within six months of the MOU. The working group will guide bilateral cooperation, determine priorities, and oversee the execution of joint initiatives.

Strategic partnership with Palantir to boost military AI and innovation

Coinciding with the signing of the Tech Prosperity Deal, the UK Government announced a new strategic partnership with Palantir[3], a move that will unlock up to £1.5 billion in investment into UK defence innovation.

This partnership is designed to:

  • Accelerate military AI capabilities, including decision-making, planning, and targeting systems already tested in Ukraine.
  • Create up to 350 high-skilled jobs and establish London as Palantir’s European HQ for defence.
  • Support UK defence SMEs, with Palantir offering pro bono mentoring and helping firms expand into US markets.

The partnership supports the UK’s ambition to become the leading edge of innovation in NATO, aligning with the Strategic Defence Review[4] and Defence Industrial Strategy 2025.

What should organisations be doing now?

The UK-US Tech Prosperity Deal offers a blueprint for growth, resilience, and innovation but also demands strategic readiness. Whether you're a prime contractor, SME, or supplier, now is the time to:

1. Review legal and compliance frameworks

  • Ensure your legal and compliance teams are up to speed on evolving procurement and export control frameworks.
  • Prepare for faster procurement cycles and more agile delivery expectations.
  • Consider how to demonstrate resilience, innovation, and UK-based capability in bids.

2. Align with sovereign cloud and cyber standards

  • Review your cloud and data infrastructure for compatibility with sovereign cloud standards.
  • Prepare for secure data-sharing protocols across allied networks.
  • Engage with Defence Digital and relevant Ministry of Defence teams to understand future requirements.

3. Position for joint R&D and innovation funding

  • Identify internal capabilities that align with AI, quantum, and fusion technologies.
  • Explore partnerships with UK and US research institutions.
  • Monitor calls for proposals and funding announcements from BEIS, MoD, and US counterparts.

4. Engage with the defence AI ecosystem

  • Explore opportunities to collaborate with Palantir or other AI-focused defence partners.
  • Position your organisation within the UK’s growing AI and data innovation landscape.
  • Monitor MoD initiatives such as the Defence AI Playbook[5] and Defence Tech Scaler.

If you’d like to discuss how this deal may affect your organisation, or explore how to prepare for upcoming changes, get in touch with Elizabeth Williams, or a member of our AAD team.

Footnotes:

[1] https://www.gov.uk/government/news/memorandum-of-understanding-between-the-government-of-the-united-states-of-america-and-the-government-of-the-united-kingdom-of-great-britain-and-north
[2] https://assets.publishing.service.gov.uk/media/68bea3fc223d92d088f01d69/Defence_Industrial_Strategy_2025_-_Making_Defence_an_Engine_for_Growth.pdf
[3] https://www.gov.uk/government/news/new-strategic-partnership-to-unlock-billions-and-boost-military-ai-and-innovation
[4] https://www.gov.uk/government/news/new-strategic-partnership-to-unlock-billions-and-boost-military-ai-and-innovation
[5] https://assets.publishing.service.gov.uk/media/65bb75fa21f73f0014e0ba51/Defence_AI_Playbook.pdf