Several big drugs companies, such as AstraZeneca, have also halted investment plans, claiming the UK is an "increasingly challenging" country to do business in.

The vast majority of the £150bn investment - £90bn - will come from Blackstone over the next decade, although how most of this money will be spent has yet to be decided. The US private equity firm announced in June it would spend £370bn across Europe over 10 years.

The technology deal will see the UK and US co-operate in areas including artificial intelligence (AI), quantum computing and nuclear power.

Microsoft has pledged to spend £22bn in the UK over the next four years, while Google is to invest £5bn over the next two years to expand an existing data centre in Hertfordshire.

Starmer said the investments were "a testament to Britain's economic strength and a bold signal that our country is open, ambitious, and ready to lead".

The PM is keen to make the UK a destination for US investment in an attempt to boost Britain's economy.

While it is hoped the investments will generate thousands of jobs in the years ahead, it comes at a time when domestic businesses appear to be slowing investment due to higher running costs.

The government says 7,600 jobs will be created by the investments, but over the year to August the number of people on UK payrolls has fallen by an estimated 127,000, according to the Office for National Statistics. Vacancies were down by 119,000 (14%) in June to August 2025 from the level of a year ago.

Many firms have blamed increasing costs, such as having to pay more in National Insurance and the minimum wage, as reasons for slowing investment.

In recent days, pharmaceutical companies have highlighted other challenges to investing in the UK. US giant Merck rowed back on a plan to invest £1bn after blaming successive governments for undervaluing innovative medicines. Instead, it will move research to the US.

AstraZeneca then paused plans to invest £200m at a Cambridge research site, a project expected to create 1,000 jobs. It has also switched investment to the US.

Meanwhile, money is also flowing from UK firms to the US. In the investment announcement, the government pointed to drugs giant GSK investing nearly £22bn in R&D and manufacturing in the US over a five-year period.

US firms pledge £150bn investment in UK as tech deal signed