UK ministers resist alignment with EU’s AI rulebook

TL;DR:

• Whitehall officials briefed against adopting EU-style AI rules as part of Sir Keir Starmer’s planned EU reset, citing damage to tech investment and US relations.
• Concerns centre on the EU AI Act, the Made in Europe procurement mandate, and the digital services tax — all areas where DSIT has resisted alignment.
• For UK businesses, the practical question is whether the lighter-touch posture that has drawn lab investment from Anthropic, OpenAI and others survives the wider EU negotiation.

UK technology ministers have warned that aligning with the European Union’s AI rulebook could “smother” British innovation, according to people briefed on internal Whitehall discussions reported by the Financial Times. The concerns surface as Sir Keir Starmer pursues closer trade and regulatory ties with Brussels.

The biggest objection inside the Department for Science, Innovation and Technology is reportedly the prospect of being forced to adopt the bloc’s position on AI regulation. The EU AI Act, considered the world’s strictest regime for machine learning, sets binding obligations for high-risk systems. The UK’s approach has so far rested on voluntary pre-market testing agreements with the AI Security Institute, with companies including Meta, Amazon and OpenAI.

Why the lighter-touch pitch matters

A bill to make those voluntary commitments legally binding had been expected in Starmer’s first King’s Speech but was shelved as the government leaned toward Washington’s lower-regulation stance. That decision is consistent with a UK pitch that has drawn substantive frontier-lab presence in London — including Anthropic’s recent 158,000 sq ft lease at One Triton Square, OpenAI’s 88,500 sq ft expansion at Regent Quarter, and reports of Jeff Bezos’s Project Prometheus eyeing space at King’s Cross. Forced alignment with EU rules would partly remove the regulatory differentiation that those lease decisions trade on.

DSIT is also reportedly worried about pressure to apply the EU’s “Made in Europe” procurement mandate to UK digital services, which has already pushed parts of the French public sector away from US software providers, and about losing flexibility on the UK’s two per cent digital services tax. President Donald Trump warned last week of a “big tariff” on the UK if the levy is not dropped.

Looking forward

For UK firms, the immediate signal is that the government is still trying to hold its narrower regulatory stance through the EU negotiation rather than accept blanket alignment. Whether that survives contact with the broader trade reset will depend on which “exception” carve-outs the UK secures — and on whether Brussels treats AI as one of those carve-outs or as a non-negotiable part of the deal.