The 'tech prosperity deal' will see the UK and US co-operate in areas including artificial intelligence, quantum computing and nuclear power.

Britain and the US have struck a tech deal that could bring billions of pounds of investment to the UK as President Donald Trump arrived for his second state visit.

Prime Minister Sir Keir Starmer said the agreement represented "a general step change" in Britain's relationship with the US that would deliver "growth, security and opportunity up and down the country".

The "tech prosperity deal", announced as Mr Trump arrived in the UK on Tuesday night, will see the UK and US co-operate in areas including artificial intelligence (AI), quantum computing and nuclear power.

It comes alongside £31 billion of investment in Britain from America's top technology companies, including 30 billion dollars (£22 billion) from Microsoft.

Microsoft's investment, the largest ever made by the company in the UK, will fund an expansion of Britain's AI infrastructure, which Labour sees as a key part of its efforts to secure economic growth, and the construction of the country's largest AI supercomputer.

Brad Smith, vice chairman and president of the firm, said it had "many conversations" with the UK Government, including No 10, "every month", adding that the investment would have been "inconceivable because of the regulatory climate" in previous years.

"You don't spend £22 billion unless you have confidence in where the country, the Government and the market are all going," he said.

"And this reflects that level of confidence."

Microsoft is backing tech firm Nscale to contribute towards developing a major data centre in the UK, which the company said would help build out Britain's cloud and AI infrastructure.

Asked how much electricity capacity would be required for the build-out and how this would be supplied, Mr Smith said: "We already have the contracts in place for the power that will be needed for the investments that we're announcing here."

Officials said the investment enabled by the tech partnership could speed up development of new medicines and see collaboration on research in areas such as space exploration and defence.

The Prime Minister said: "This tech prosperity deal marks a generational step change in our relationship with the US, shaping the futures of millions of people on both sides of the Atlantic, and delivering growth, security and opportunity up and down the country."

The build-up to Mr Trump's second state visit has already seen London and Washington announce a deal on co-operating on building new nuclear power stations, and a £5 billion investment by Google in Britain's AI sector.

It also follows the agreement of an economic deal in May this year that covered a reduction in some tariffs imposed by Mr Trump in April, although plans to eliminate US tariffs on British steel have now been shelved.

It emerged on the eve of Mr Trump's visit that a proposed deal to secure the removal of the levy, which stands at 25%, has been put on ice.

Technology Secretary Liz Kendall said the US-UK tech deal was "a vote of confidence in Britain's booming AI sector" that would "deliver good jobs, life-saving treatments and faster medical breakthroughs".

The deal was also praised by tech bosses, including Jensen Huang, founder of chip company Nvidia, which has agreed to deploy 120,000 advanced processors across the UK to help the British AI sector.

Mr Huang said: "Today marks a historic chapter in US-United Kingdom technology collaboration.

"We are at the Big Bang of the AI era - and the United Kingdom stands in a Goldilocks position, where world-class talent, research and industry converge."

Other investments announced alongside the tech deal include:

- £1.5 billion from AI cloud computing company CoreWeave to expand data centre capacity and operations, including a partnership with UK firm DataVita

- £1.4 billion from Salesforce, aimed at making its UK business an AI hub for Europe, part of a £4.4 billion investment over the next five years

- More than £1 billion from UK-based AI Pathfinder to deliver additional compute capacity, starting in Northamptonshire

Salesforce chief executive Zahra Bahrololoumi said: "We'll tap into the UK's legacy of global AI breakthroughs and expertise to create an AI hub for Europe.

"With new R&D teams and groundbreaking AI innovation, we'll help create jobs right here in the UK."

ChatGPT developer OpenAI has also agreed to partner with Nscale to deploy its Stargate data centre project at a new AI growth zone in the north-east of England with sites in Blyth and Cobalt Park near Newcastle.

The Government said Cobalt Park would see thousands of cutting-edge computer chips expected to be rolled out by NScale.

The AI growth zone as a whole, with the new data centre in Blyth, will "increase its energy capacity to 1.1GW in the next six years - making it one of the biggest data centres in Europe and creating thousands of new jobs," the Department for Science, Innovation and Technology said.

It will create potential for more than 5,000 jobs and £30 billion in private investment, according to officials.

Sam Altman, OpenAI's chief executive, said: "The UK has been a longstanding pioneer of AI, and is now home to world-class researchers, millions of ChatGPT users, and a government that quickly recognised the potential of this technology.

"Stargate UK builds on this foundation to help accelerate scientific breakthroughs, improve productivity, and drive economic growth."

North East Mayor Kim McGuinness said: "Today's announcement of an AI Growth Zone places the North East at the forefront of the next technology revolution and will lead to billions of pounds of new investment in our region, thousands of better jobs and new opportunities for local people."

Julia Lopez, shadow science secretary, said the Conservatives welcomed the announcement, adding: "But it comes against a backdrop of declining foreign direct investment into the UK. Under Labour, the number of FDI projects fell by 12% last year to the lowest level on record."

The potential of the UK's "world-leading scientists, innovators and tech firms" is being "squandered", Ms Lopez said, adding: "The loss of major pharmaceutical deals, including AstraZeneca's decision to pause its planned £200 million investment in Cambridge, is a damning indictment of Labour's failure to provide a stable and competitive business environment."

On Wednesday, pharmaceutical giant GSK announced plans to invest 30 billion dollars (£21.9 billion) in research and development as well as supply chain infrastructure in the United States over the next five years.

The investment includes 1.2 billion dollars (£878.9 million) to build new biopharma factories and laboratories in the US, AI and digital technologies, the company confirmed.

UK and US strike tech deal as Trump arrives for state visit