Trump Suspends $40BN Tech Deal With UK Over Free Speech Crackdown

Authored by Steve Watson via Modernity.news,

The Trump administration has delivered a major blow to UK-US relations by suspending a massive $40 billion Tech Prosperity Deal, citing Britain’s aggressive censorship regime as a direct threat to American tech giants and their ability to operate freely.

This move underscores Trump’s zero-tolerance stance on foreign policies that undermine US interests, especially when they involve stifling free speech and handing advantages to global competitors like China.

The White House paused the tech prosperity deal amid concerns the UK government’s draconian Online Safety Act, which regulates online speech, will stifle American artificial intelligence companies, the Telegraph reports.

Donald Trump suspended a landmark tech deal with the UK amid concerns the Online Safety Act will stifle American artificial intelligence companies, the Telegraph understands.

Read more here https://t.co/c8LrpPDoY4 pic.twitter.com/sQzjZsr3L0

— The Telegraph (@Telegraph) December 16, 2025

The law allows the British government to levy large fines on tech giants it deems have facilitated ‘hate speech’.

After the rise of artificial intelligence, companies like OpenAI or xAI can face huge fines – harming their growth and giving China an edge in the AI race.

On Tuesday, it was revealed that the £31bn agreement has been suspended as the White House seeks to improve terms on a wider UK-US trade deal agreed in May.

BREAKING: President Trump has suspended the £31 billion ‘tech prosperity’ deal with Britain. GB News’ Political Editor Christopher Hope reacts, calling it ‘a disaster.’ pic.twitter.com/j0ZTCfvENb

— GB News (@GBNEWS) December 16, 2025

On Dec 3, Liz Kendall, the Technology Secretary, said the government planned to impose new restrictions on chatbots to ensure AI companies do not benefit from loopholes in the law.

“The perception is that Britain is way out there on attempting to police what is said online, and it’s caused real concern”, a source with knowledge of the decision to suspend the deal stated.

“Americans went into this deal thinking Britain were going to back off regulating American tech firms but realised it was going to restrict the speech of American chatbots,” the source added.

The deal, announced in September during Trump’s state visit to the UK, included pledges of £22bn from Microsoft and £5bn from Google to create an AI growth zone in north-east England, potentially generating £30bn in economic value and 5,000 jobs. 

Leftist UK Prime Minister Keir Starmer hailed it as “a generational stepchange in our relationship with the US,” while Trump described it as a path to “dominate” in AI and lead the technological revolution “side by side.”

Beyond censorship, Washington has raised issues with the UK’s digital services tax on US tech firms and food safety rules blocking certain agricultural exports, framing the pause as part of hard-nosed negotiations to eliminate trade barriers.

A British government source downplayed the suspension as “the usual bit of hardball negotiations by the Americans,” adding that US Commerce Secretary Howard Lutnick “is a tough guy. We understand that the Americans negotiate incredibly hard but we’ll stand our ground. They want what’s best for their country, we want what’s best for ours.” 

Another source labeled it “part of the shape of the negotiations” with Washington.

This latest escalation highlights the ongoing free speech crisis in the UK, where authorities have ramped up arrests for online expression. As we reported earlier, the latest insane case has seen a man jailed for 18 months over two anti-immigration tweets viewed just 33 times combined—a stark example of the regime’s overreach.

The broader pattern is alarming: nearly 10,000 arrests in 2024 alone for “grossly offensive” social media posts, equating to 30 per day, while violent crimes like knife attacks and burglaries are sidelined.

Trump has long been attuned to Britain’s erosion of rights, dispatching a “free speech squad” from the State Department in May to investigate cases of activists arrested for silent protests and online dissent. 

He’s even offered political asylum to UK “thought criminals,” including those prosecuted for gender-critical views or immigration criticism, positioning America as a haven for those fleeing authoritarian overreach.

With the US now leveraging economic deals to push back against censorship, this suspension sends a clear message: alliances come with strings attached when basic freedoms are at stake. As Britain doubles down on policing speech, Trump is ensuring American innovation—and expression—won’t pay the price.

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