The “Special Relationship” between the United Kingdom and the United States was born in the aftermath of the Second World War where Sir Winston Churchill used the phrase in 1946 during his Iron Curtain speech in Missouri. He argued for a permanent partnership between London and Washington to contain the Soviet threat on the basis that the partnership was military, intelligence and nuclear cooperation. Fast forward to 2025, this ‘Special Relationship’ endured wars, recessions and rivalries, adapting each time to fit a changing world.

When I visited Chatham House, Sir Richard Barrons, KCB CBE, mentioned that the Special Relationship has never been one of equals. Britain has long drawn more from American protection than it could ever offer back, and he warned that London may have to spend more on defence if it wants to keep that bargain alive. Others at the event pointed out that Washington’s attention is locked on China. The U.S. has imposed sweeping tariffs on Chinese imports, even though China is the world’s largest exporter of manufactured goods. This leaves the UK in a familiar but uncomfortable position: dependent on American backing, but with a partner whose gaze is elsewhere.

At the same session, Laurel Rapp stressed that Washington increasingly views technology as a new source of power, equal to the role nuclear weapons once played. China sees it the same way. Both are racing to dominate semiconductors, artificial intelligence and cloud computing. The United States now wants allies who can help extend this technological edge, and Britain has put itself forward. Earlier this year the U.S. cut a tariff pact with London, lowering duties on UK steel to 25%, half the level applied to other countries (50%). More importantly, the two governments have signed a Tech Prosperity Deal, which has already triggered a flood of American investment into Britain’s AI infrastructure.

The scale of this pivot is striking. Microsoft has pledged around $30 billion in the UK by 2028, half of it for cloud and AI data centres. In partnership with the British firm Nscale, it is building a supercomputer fitted with tens of thousands of Nvidia chips, a system designed to run OpenAI’s most advanced models locally. This project, called Stargate UK, is backed by Nvidia and OpenAI as well, and symbolises how Britain is being placed at the centre of America’s AI infrastructure. According to the Financial Times, Microsoft and other customers will deploy 120,000 of Nvidia’s latest Blackwell AI chips in the UK by the end of next year. With each chip priced at more than $30,000, this represents an investment of over $3.6 billion, creating the largest such cluster in Europe and cementing Britain as a key European node in U.S. tech strategy. Google has added its own weight with a £5 billion data centre in Waltham Cross, which Chancellor Rachel Reeves said would create more than eight thousand jobs a year, highlighting how these investments are pitched not only as a leap in technological capacity but also as a direct boost to the British economy.

The economic stakes for Britain are obvious. These investments provide thousands of high-skilled jobs, a pipeline of funding for universities and startups, and a chance to diversify away from over-reliance on financial services. Politically, they allow the UK to claim it is a leader in AI rather than a consumer of it, ultimately allowing the UK to progress with their AI Opportunities Action Plan. But there is also a risk that Britain becomes more of a host economy than a true controller of this new infrastructure, since the revenues ultimately flow back to U.S. corporations. For the United States, meanwhile, the payoff is clear. By anchoring its tech giants in Britain, Washington secures long-term revenue streams for its companies, protects shareholder value, and spreads infrastructure costs across allied territory while keeping the profits. It also strengthens the global position of American firms in the AI race with China, ensuring that U.S. technology remains embedded in one of the world’s major economies.

Britain’s leaders have embraced this pivot. Keir Starmer argues that the tech partnership could make the UK a leader in artificial intelligence, allowing it to be an AI maker rather than just a consumer of American innovation. It is an ambitious attempt to show that Britain, after Brexit and relative economic stagnation, can still shape the industries of the future. But the paradox is familiar. In the Cold War, London leaned on U.S. nuclear and military power, often forced to follow Washington’s foreign policy lead in return. Today it risks leaning on U.S. technology in much the same way, its sovereignty limited by the fact that the servers and supercomputers that underpin its AI ambitions are American-built.

The story of the Special Relationship is therefore one of continuity as much as change. Defence and intelligence laid its foundation, but data centres and AI chips are now writing its future. Economically, the UK stands to gain jobs, research funding and prestige, but much of the profit and control will still rest in American hands. For the U.S., the deal secures long-term ROI for its firms and consolidates its dominance in the global AI market. Britain is betting that U.S. investment can lift it into the ranks of global tech powers. My judgement is that the gamble may succeed in raising Britain’s profile, but it will also deepen its reliance on Washington. Churchill once defined the Special Relationship through security; today it is defined through technology. And just as in the past, the relationship still tilts toward American power.