‘Nothing is off the table’: The U.S.-UK tech talks are underway

Summary

Title: POLITICO Tech – ‘Nothing is Off the Table’: The U.S.-UK Tech Talks Are Underway
Host: Stephen Overlee
Guest: Peter Kyle, UK’s Secretary of State for Science, Innovation and Technology
Release Date: March 24, 2025

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Introduction

In the March 24, 2025 episode of POLITICO Tech titled “‘Nothing is Off the Table’: The U.S.-UK Tech Talks Are Underway,” host Stephen Overlee engages in a comprehensive dialogue with Peter Kyle, the UK’s Secretary of State for Science, Innovation, and Technology. The conversation delves into the burgeoning technological collaboration between the United States and the United Kingdom, exploring areas of synergy, negotiation challenges, regulatory frameworks, and the overarching vision for future partnerships.

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Vision for US-UK Technological Collaboration

Peter Kyle opens the discussion by emphasizing the United States and the United Kingdom’s commitment to joining forces in artificial intelligence (AI) and other cutting-edge technologies. He describes the partnership using terms like "positive, upbeat, and opportunity," highlighting an optimistic outlook despite existing geopolitical tensions.

Peter Kyle (02:04): "Safety has a purpose in obviously making us safe. Safe, but also making us feel safe. And when we feel safe, we can then explore all of the opportunities that AI has."

Kyle underscores that the UK aims to not just maintain but amplify its collaborative efforts with the US to stay at the forefront of technological innovation, ensuring both national security and economic prosperity.

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Negotiating the Digital Services Tax

A significant portion of the conversation addresses the ongoing negotiations surrounding the UK's Digital Services Tax (DST), a point of contention with the Trump administration. Overlee probes whether the UK might consider concessions to reach a bilateral agreement.

Stephen Overlee (03:25): "You're in the process now of hammering out a deal with the US, right? A new economic agreement. I hear that the UK's digital services taxes are on the negotiating table. Is that the case?"

Peter Kyle responds by affirming that the negotiations are comprehensive, indicating that "nothing is off the table." He alludes to the potential adjustments in DST but refrains from divulging specifics, maintaining the confidentiality expected in such high-stakes discussions.

Peter Kyle (04:28): "Nothing is off the table at this point, but I just want people to focus on what those discussions will do in terms of bearing fruit that will benefit both of our countries."

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The UK's Online Safety Act and Regulatory Stance

Transitioning to regulatory matters, Overlee inquires about the UK's Online Safety Act and whether it might be softened to facilitate the US-UK deal. Kyle passionately defends the Act, framing it as a cornerstone for child safety in the digital realm, aligning with shared values between the two nations.

Peter Kyle (06:21): "The Online Safety Act’s core principles are keeping children safe in a digital age. And these are values that we share with the United States."

Kyle asserts that the Act is not merely regulatory but a reflection of societal values, ensuring that technological advancements do not compromise the safety and well-being of the younger generation. He emphasizes that while the UK is open to collaboration, safeguarding fundamental values remains non-negotiable.

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Balancing Innovation and Regulation

Overlee raises concerns about the Trump administration’s apparent backpedaling on tech regulation and questions if the UK might follow suit. Kyle robustly counters this, asserting the UK’s commitment to fostering innovation without stifling it through excessive regulation.

Peter Kyle (07:57): "We are not going to do anything that would get in the way of innovation, the ability to commercialize, to upscale and to create the wealth and jobs that we need from technology."

Kyle highlights that the UK’s approach differs from the US’s regulatory fluctuations, positioning the UK as a stable and attractive environment for technological growth and investment. He reassures that the UK’s regulatory frameworks are designed to support, not hinder, technological advancements.

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Navigating US Political Dynamics and Influential Figures

The conversation also touches upon the dynamics within the US administration, particularly the influence of figures like Elon Musk and the administration’s stance towards the UK government. Overlee suggests that Musk may pose challenges to the US-UK relationship.

Stephen Overlee (12:09): "Does Elon Musk get in the way?"

Kyle dismisses these concerns, emphasizing the robustness of the US-UK alliance and the ability to navigate individual influences without compromising the strategic partnership.

Peter Kyle (12:09): "There is nothing at the moment that gets in the way of that special relationship and our ability to seek out areas of common ground."

Kyle points to the shared values and long-standing alliance between the two nations as a buffer against internal political tensions, ensuring that the broader strategic objectives remain intact.

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Reaffirming US-UK Alliance Amid Global Shifts

Kyle addresses the changing global landscape, including the UK's post-Brexit relationship with the EU and the shifting geopolitical dynamics involving Russia and China. He positions the US-UK partnership as a stabilizing force capable of adapting to global disruptions.

Peter Kyle (15:07): "What we're doing is having a cold, hard look at what Britain does well, what Britain aspires to do better, and then putting it into the context of our relationship with the United States."

He emphasizes the importance of forming strong alliances in areas like AI, space, biological sciences, and climate technology to navigate and thrive amidst global challenges and opportunities.

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Attracting Investment and Fostering UK Tech Ecosystem

Highlighting the UK’s proactive stance in attracting venture capital and fostering a vibrant tech ecosystem, Kyle discusses his engagements with key industry players in California. He conveys the UK’s readiness to eliminate investment barriers and create an inviting environment for global tech pioneers.

Peter Kyle (16:53): "We are now here and hungry for investment. We're open for investment, and the barriers you told me that existed to investment have gone. So come on, let's go, let's get cracking, creating the jobs and opportunities that are available in the UK."

Kyle speaks to the UK’s reinvigorated investment landscape, aimed at creating jobs and driving economic growth through technological innovation, while also ensuring that these efforts align with national and allied interests.

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Conclusion: A Golden Window of Opportunity

As the discussion wraps up, Kyle encapsulates the essence of the US-UK tech talks, referring to the current period as a "golden window of opportunity." He remains optimistic about the potential outcomes of the negotiations, foreseeing substantial economic and societal benefits for both nations.

Peter Kyle (18:13): "This is a real golden window of opportunity for us at the moment, a golden opportunity that we want to grab with both hands."

Overlee acknowledges Kyle’s insights and the promising trajectory of the US-UK partnership, concluding the episode on a note of cautious optimism and anticipation for future developments.

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Notable Quotes with Timestamps

1. On the Purpose of Safety in AI:

   Peter Kyle (02:04): "Safety has a purpose in obviously making us safe. Safe, but also making us feel safe. And when we feel safe, we can then explore all of the opportunities that AI has."

2. Regarding Comprehensive Negotiations:

   Peter Kyle (04:28): "Nothing is off the table at this point, but I just want people to focus on what those discussions will do in terms of bearing fruit that will benefit both of our countries."

3. On Commitment to Innovation:

   Peter Kyle (07:57): "We are not going to do anything that would get in the way of innovation, the ability to commercialize, to upscale and to create the wealth and jobs that we need from technology."

4. Addressing the US-UK Alliance Strength:

   Peter Kyle (12:09): "There is nothing at the moment that gets in the way of that special relationship and our ability to seek out areas of common ground."

5. On the Opportunity Presented by Current Negotiations:

   Peter Kyle (18:13): "This is a real golden window of opportunity for us at the moment, a golden opportunity that we want to grab with both hands."

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Final Thoughts

This episode of POLITICO Tech provides an in-depth exploration of the strategic dialogues shaping the future of US-UK technological collaboration. Through Peter Kyle’s insights, listeners gain an understanding of the complexities and opportunities inherent in international tech negotiations, the balancing act between regulation and innovation, and the unwavering commitment to fostering a robust transatlantic alliance in an era defined by rapid technological advancement and geopolitical shifts.

Transcript

[Stephen Overlee]

Welcome, ladies and gentlemen, to Mario's Bistro.

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[Stephen Overlee]

Hey, welcome back to Politico Tech. I'm your host, Stephen Overlee. President Donald Trump has a lot of US allies on edge. But you wouldn't know that from talking to Peter Kyle, the UK's Secretary of State for Science, Innovation and Technology. He's a relentless believer that the US and UK will join forces on artificial intelligence and other cutting edge technologies. Positive, upbeat, opportunity. All words he used repeatedly in our interview. Now, every politician is a salesman and Secretary Kyl no exception. But his rosy vision faces real obstacles, like the Trump administration's criticism of the UK's digital taxes or its free speech record. Elon Musk's very vocal disdain for Prime Minister Keir Starmer. I caught up with Secretary Kyle at the end of a visit to the west coast to ask about all that and more. Here's our conversation. Secretary Kyle, welcome to Politico Tech.

[Peter Kyle]

Thank you. It's great to be with you.

[Stephen Overlee]

You know, we had your predecessor on the podcast a couple of times and we often talked about AI safety. That was going to be Britain's thing. I think we can both sort of say that the AI safety conversation has moved on. What will be your new thing? What's your 30 second elevator pitch?

[Peter Kyle]

Well, I don't think it's a new thing. I think safety is still important. I've been more honest about the nature of the safety and I've changed the name of the Safety Institute to the Security Institute because the majority of the work we do isn't what most people associate with actually safety. It's actually about national security. For the first time, I've spoken openly about the work of the Institute and the work that it does to keep us safe from things like chemical and biological attacks, radiological attacks, and other potential uses of the very powerful frontier AI to do us harm and the very constructive work we do with the frontier AI labs to do so. So that is the nature of the safety. But it's also very clear that safety has a purpose. Safety has a purpose in obviously making us safe. Safe, but also making us feel safe. And when we feel safe, we can then explore all the opportunities that AI has. And I think my criticism of the predecessor and the, the, the previous government was that they did do a great job on safety, but they never put that safety to task, never gave it a purpose. And now people feel safe. We need to be out there exploring all of the opportunities, the economic, the developmental, all of the great things that AI can do for us as individuals, communities and a country. We need to now be exploring. And that's what I'm focusing on as well.

[Stephen Overlee]

Well, those ambitions extend beyond the UK's borders. And I have to hit you with a newsy question here. You're in the process now of hammering out a deal with the US, right? A new economic agreement. I hear that the UK's digital services taxes are on the negotiating table. Is that the case?

[Peter Kyle]

We are exploring all of the things that both territories, the United Kingdom and the US either are concerned about or are excited about doing into the future. We're deeply integrated as two communities, two countries, and we want to show that actually in the future, as we renew the special relationship that technology is at its heart, that is quantum fusion, space, biological sciences. These are the things we pioneer in as two nations. And acting together, we can add up to more than the sum of our parts. Now, there are other areas that we want to discuss, both of us, and those things are now part of that discussion. Nothing is off the table at this point, but I just want people to focus on what those discussions will do in terms of bearing fruit that will benefit both of our countries.

[Stephen Overlee]

So nothing's off the table. I hear you on that. I mean, those digital taxes have been a sticking point for the us. What would be worth it to the UK to give those up?

[Peter Kyle]

Well, I'm not going to do the negotiations in public. I know you'll understand that.

[Stephen Overlee]

Come on, you can tell us.

[Peter Kyle]

You can see that the British Prime Minister, Keir Starmer, the US President, Donald Trump, they've had a series of great phone calls. They met in the Oval Office recently and had a really constructive meeting. So we're right in the starting gates of a great opportunity. And what we're doing is trying to focus on that great opportunity. And you know as well as anyone else that those discussions need to be taking place, respecting the fact that we need discretion as we go through that process. But it won't be long and I'm very happy to come back on this show and talk about any of the agreements that come out the other side. But believe me, they will be an agreement that benefits both countries. And in a race which is a global race, where we're talking about technology, which is potent, it is strident, and it is going to be epoch defining, it is incredibly important that countries like America and Britain are at the forefront of that race, that we stay ahead of that race as we go forward, because it will be crucial to our economic success, to our societal success, our national security, and the way we keep our people safe into the future, but also our ability to exercise power and influence globally in the future. So, so for those reasons, it is imperative that we work together. Because if we work together, the chances of us succeeding and prevailing and continuing to prevail into the future become an awful lot better.

[Stephen Overlee]

With the full appreciation that you're not negotiating here on the Politico tech podcast, I am curious if the UK is open to softening its Online Safety act, some of these regulations that you have in order to get a deal done?

[Peter Kyle]

Well, actually, the Online Safety act, its core principles are keeping children safe in a digital age. And these are values that we share with the United States. Elon Musk and the first lady both campaign vigorously on child safety, and that is the core function of the Online Safety Act. So this year, for example, just in recent weeks, the requirement to take illegal content offline has come into force. And over the summer, the requirement for providers and content creators to make sure that the content that they put online is suitable for the age of those who are consuming it is going to come into force. Now, all of these things are about protecting family life. All of these things are about making sure children have a great experience growing up in an online world, just as we as families and communities strive to ensure that children grow up safely in the offline world. So I think these are sorts of things I think we're very keen to explain about our approach to online safety because the majority of activity that we undertake is actually about keeping children safe and making sure they grow up in a values based society where they are free to grow and develop and ensure that they are protected from the worst harm that's out there.

[Stephen Overlee]

Part of the reason I ask is that right now it seems in the U.S. the Trump administration is backpedaling a bit on tech regulation. And we've heard a lot of resistance from this administration to overseas tech regulation. The question I hear is sort of, is it basically inevitable that the UK is going to have to backpedal as well?

[Peter Kyle]

Well, we haven't over regulated when it comes to critical technologies. When you look at AI, for example, we've not legislated on AI. The EU has legislated on AI with frontier AI, we're watching very, very closely. And we do have a commitment that the voluntary code that the AI labs are signed up to is enshrined in law. That's simply to ensure that national security issues are taken into account. But we're not going to be legislating over things like free speech and the like because those issues are taken care of in other parts of the legislative landscape and actually is not dissimilar than you'd find in other comparable countries. No, what we're doing is focusing on innovation. As I said before, it is imperative that countries like Britain and America win this race. But this race needs to be won again and again and again into the future in perpetuity. So we are not going to do anything that would get in the way of innovation, the ability to commercialize, to upscale and to create the wealth and jobs that we need from technology and that those be jobs that are based in Britain and also benefit our key allies. And there is no greater ally for Britain than the United States. None of those things will be diminished by regulation and I can absolutely assure you of that.

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[Peter Kyle]

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[Stephen Overlee]

You know, you mentioned earlier about one of your decisions you've made since taking on your role was renaming the UK AI Safety Institute to the UK AI Security Institute. And there are a lot of folks who interpreted that as an overture to the Trump administration. Do you feel pressure to stay in lockstep or in the good graces of this new administration?

[Peter Kyle]

I don't feel pressure at all, actually. But I do feel the desire to understand where our key ally is going and what it is thinking and to make sure that Britain is a key steadfast ally to America. But when it comes to the Safety Institute, I was briefed within a couple of days of becoming Secretary of State. I had a classified briefing on the work that the Institute was doing and it was very, very clear from that very, very early stage that the majority activity that the Safety Institute was undertaking was national security related. So it's been at the back of my mind for a while. It took me quite a while to get the intelligence community to get to a point where they were comfortable talking about this more publicly. But I don't want to give the impression I had to cajole them at all because they were very, very keen that the world understands a lot more of the potential security threats from Frontier AI but also to reassure people that we are aware of this activity and we are taking measures with that activity, working very closely. Because don't forget, we have a memorandum of understanding between the US Institute and the UK Institute. We work very constructively together. We are part of the Five Eyes intelligence network and we're very deeply integrated as two nations when it comes to defense and security and intelligence. And of course, we work incredibly closely with the Frontier Labs as well. And I've been told today, because I'm in California and I've been meeting some of the Frontier Labs themselves, that the ability to rely on the activity of the Safety Institutes means that they can focus more on innovation. So the work we're doing is, is helping the speed of deployment of innovation and does not stand in the way, because I wouldn't allow anything to stand in the way of the swift deployment of innovation into both of our societies.

[Stephen Overlee]

Does that include Elon Musk? All these plans to align with the US work with the US Does Elon Musk get in the way?

[Peter Kyle]

There is nothing at the moment that gets in the way of that special relationship and our ability to seek out areas of common ground. There are differences between the US and the uk. We're not identical countries, even though when you look at all of the issues that we've discussed today, we share values, we share principles, we share common goals in about economic growth, about values as nations, about our impact and influence around the world when it comes to spreading democratic values. Now within that, there's going to be economic priorities that both of our nations have and as mature partners that go back a very, very long way and have been through very difficult times together. We should be there having discussions about our priorities, finding common ground, joining up over those areas of common ground for the benefit of both of our economies, both of our peoples and both of our societies.

[Stephen Overlee]

I do hear you on that, I guess. This administration, though, in particular has sort of not been wedded to the allies and the commitments of the past. And Elon Musk has Donald Trump's ear and he's Not a fan of the UK Government right now.

[Peter Kyle]

There is so much that bonds our two peoples and our two nations together, and that's something which we should celebrate. We are in a period of renewal that's nothing new. Every time there is a change of presidency and administration in the US Every time there is a change of government in the uk, there is a period of renewal. For me, that is exciting because it's full of potential and opportunity. And we as a government are focused on that excitement and the opportunity. We're not focused on anything else that people want to kind of get us bogged down in. So, yes, there is lots of things that's out there at the moment that we're excited about. Just to give you a sense of how important this is for US in the UK we haven't had a change of administration in the UK for 14 years. Before that it was 13 years. Before that it was 18 years. We don't have the same period of transition and political renewal as frequently as you do here in the United States. So this is a real golden window of opportunity for us at the moment, a golden opportunity that we want to grab with both hands. So that's why you're seeing us really focused. You can see that the first meeting that the President had with the Prime Minister was a really constructive one. They've had numerous phone calls since. Our teams have come together already to try and discuss what an economic partnership would look like. These are all really functional. These are all really upbeat. These are really exciting opportunities for both of our nations as we go through this period of renewal and come out the other side, hopefully with benefits for both of us.

[Stephen Overlee]

Are you trying to draw a contrast between yourselves and the European Union? It seems like you have a chance here, you know, when it comes to tech in particular, to say, like, you know, hey, we're not like those tech haters over there on. On the continent.

[Peter Kyle]

So I would frame it differently. We're not saying to ourselves, the EU is doing this, therefore we're going to do that, something different. What we're doing is having a cold, hard look at what Britain does well, what Britain aspires to do better, and then putting it into the context of our relationship with the United States, with the new administration. We're also, incidentally, doing the same with the EU at the moment as well, because we're trying to establish a new relationship with the EU post Brexit, with a new EU commission and a new administration in the United Kingdom, because the world has just moved on so fast. Just look at what's happening in the world at the moment that simply wasn't there five or six years ago. The relationship between the EU and Russia has changed profoundly with the illegal invasion of Ukraine, China, and its relationship and its assertiveness around the world and sometimes its hostile actions has changed profoundly as well. AI, space, biological sciences and biomechanics and health tech and climate tech, all of these things have now come to the absolute forefront. So all of these things are new. We have a set of new partners as well because of the change of administrations. And all I see in all of that upheaval and disruption is positive opportunity to found the partnerships that will get us through to the future in a positive way, a way that enables us to benefit from all of these changes and not succumb to the challenges that sometimes they pose.

[Stephen Overlee]

We're talking now. You just finished up your fourth trip to California in a year. Who has your ear out there on artificial intelligence going forward? I mean, are you texting now with Jensen Huang and Sam Altman and all these CEOs?

[Peter Kyle]

I'm very privileged on behalf of the British government to have formed strong relationships with lots of people who are pioneers in the new economy, including some of the people that you've just named. And I met Jensen this morning. So we are having these really positive meetings. But I'm not just here for always big Tech. I'm also here to meet the venture capitalist community, the investment community. I meet a lot of people who have started businesses in Britain and come to the US because I want to really understand why they felt the need to leave the UK and come to California in order to what they believed would be a better chance of success. And certainly when I came here a year and a bit ago when I was in opposition and people told us what needed to change in Britain in order to become more investment friendly. It's a great thing to do, to come back and say, well, look, all those things you said needed to happen, they have now happened. So we are now here and hungry for investment. We're open for investment, and the barriers you told me that existed to investment have gone. So come on, let's go, let's get cracking, creating the jobs and opportunities that are available in the uk. But also I'm here to talk about the positive things that we've done and the ambitions that we have. This is a relationship that I'm forming with organizations and with your government here. And I'm very keen that that is a relationship that delivers for both of us.

[Stephen Overlee]

Well, listen, Secretary, I'm going to take you up on that offer to chat after the UK US tech deal is done. But I appreciate you being here today.

[Peter Kyle]

Yeah, great, thanks. I can't tell you how much of a privilege it is to speak with you, but also communicate and with your listeners for. For whom I have a lot of respect.

[Stephen Overlee]

That's all for today's Politico Tech. If you enjoy Politico Tech, recommend it to a friend or colleague and be sure to subscribe. For more tech news, subscribe to our newsletters, Digital Future Daily and Morning Tech. Music in our show comes from the mysterious Breakmaster Cylinder. Our managing producer is Annie Reiss. Philip Frobos. Helen help produce today's episode. I'm Stephen Overlea. See you back here on Thursday.