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In this Ai Defence Journal Insights article, we read a new whitepaper from Defence Holdings PLC. The paper critically examines the concept of UK sovereignty in the digital age, arguing that critical capabilities now reside in cloud platforms and algorithms rather than traditional military assets. The central theme explores the tension between the necessity of partnering with massive US hyper scalers (like AWS, Microsoft, and Palantir) for scale and innovation, and the resulting vulnerabilities and dependencies created by foreign ownership. To achieve genuine resilience, the paper concludes that the UK must carefully balance these indispensable alliances with deliberate investment in its own sovereign technological capabilities and an industrial base to ensure freedom of action in times of crisis, citing cyberattacks like the one at Heathrow as urgent evidence of this need. The document also compares the UK's position to the strategies of the US, China, and the EU, advocating for the integration of domestic UK tech firms to avoid relying solely on external partners.

1.0 The Shifting Definition of National Sovereignty in the 21st Century

In the last century, national sovereignty was tangible and could be photographed: it was visible in the steel hulls of warships and the roar of fast jets. Today, the assets that define a nation's strength and independence are increasingly invisible. Sovereignty now lies in code, cloud platforms, and algorithms—the dematerialized, critical infrastructure that underpins modern defence, national resilience, and public trust. This fundamental shift has transformed the strategic landscape in three core ways.

Dematerialized Infrastructure

Strategic assets have shifted from physical resources like steel and oil to the digital foundations of the modern state. Fibre-optic cables, sprawling server farms, and global cloud platforms now constitute the essential terrain upon which national security is built. Information is no longer merely a tool of policy; it has become the battlespace itself.

Ambient Conflict

The line between peace and war has become irrevocably blurred. Persistent cyberattacks, coordinated disinformation campaigns, and hybrid operations create a state of "ambient conflict." The recent cyberattack on Heathrow Airport serves as a stark example. While not an act of open warfare, its disruption of critical civilian infrastructure demonstrated how national confidence, and operational readiness can be strategically undermined without a single shot being fired.

Migration of Control

Control over the systems most critical to the digital age—cloud platforms, data pipelines, and AI models—has migrated from the state to the private sector. Crucially, the handful of providers with the scale to deliver these services are predominantly headquartered outside the UK. Their incentives are commercial and global, which do not always align with the specific requirements of UK national sovereignty, creating a structural vulnerability.

This new reality of dematerialized infrastructure, ambient conflict, and migrated control has led the UK to form indispensable but strategically complex partnerships with a small number of major technology firms.

2.0 The Architecture of Dependency: UK Reliance on Foreign Technology Partners

Over the past decade, foreign technology companies, primarily from the United States, have become deeply embedded in the core of the UK's defence and security apparatus. These partnerships provide indispensable capabilities, including the scale, resilience, and innovation that the domestic ecosystem cannot currently replicate alone. This integration is now a fundamental feature of the UK's national security architecture.

The key US-based technology partners fulfil distinct but interconnected roles:

Hyperscale Providers:

The technology giants AWS, Microsoft, Google, and Oracle supply the "backbone" of the UK’s cloud, AI, and cyber infrastructure.

Their platforms provide the vast processing capacity and resilience required to manage the full spectrum of modern defence workloads, from secure communications and logistics to the storage and analysis of immense intelligence datasets.

Advanced Analytics Platforms:

Palantir occupies a central role in this ecosystem, providing advanced platforms that integrate and analyse multiple streams of information for defence and national security missions.

Its proven ability to render complex data usable in near real-time, demonstrated in contexts ranging from logistics support in Ukraine to data fusion within Whitehall, makes it a powerful and attractive capability for UK decision-makers.

Emerging Defence Technology:

Companies like Anduril represent a new strand of the defence-industrial ecosystem, known for rapid innovation in autonomous systems and situational awareness.

Anduril has deliberately positioned itself as a fast-moving alternative to traditional defence primes and is increasingly visible in allied procurement pipelines, including those of the UK.

This deep integration with the US technology ecosystem is formalized by the UK–US Tech Prosperity Agreement. Far from a new initiative, the agreement simply formalises what has already been reality: the UK’s sovereign capability is deeply intertwined with that of its closest ally. While these partnerships are essential for maintaining a modern defence posture, they also introduce critical strategic risks that must be understood and managed.

3.0 Analysis of Strategic Risks and Vulnerabilities

The central challenge facing the UK is not whether to partner with foreign technology firms—such collaboration is essential—but how to manage the associated risks. Without sufficient sovereign safeguards, reliance can harden into a critical dependency, eroding the UK's freedom of action during a crisis. This dependency creates three distinct categories of strategic risk.

Jurisdictional Risk

The US-based hyperscale providers that form the UK's digital backbone are governed by the laws of their home state. This includes the CLOUD Act, a piece of US legislation that can compel these companies to disclose data stored on their systems, regardless of where in the world that data physically resides. This creates a potential conflict with UK sovereignty, where critical national data could become subject to foreign legal obligations in ways that are complex and not always transparent.

Narrative Risk

Firms such as Palantir and Anduril often present themselves as "champions of sovereignty" in UK policy debates, framing their platforms as tools that guarantee national independence. While their capabilities are undeniable, this marketing narrative masks a structural reality: as US businesses, their ultimate alignment is with Washington, not Westminster. This is not a question of goodwill but a fundamental matter of corporate and national allegiance. When sovereignty is defined by ownership and the freedom to act, foreign-owned platforms cannot, by definition, fully deliver it.

Industrial Risk

Procurement frameworks that default to large foreign primes risk stifling the UK's domestic technology industry. The UK has a vibrant ecosystem of sovereign talent and intellectual property, but these firms are often under-leveraged and unable to scale. This trend is widening a dangerous gap: the UK continues to produce world-class ideas, but the platforms that operationalize them are increasingly controlled from abroad. Without deliberate intervention, sovereign innovation will not translate into sovereign industrial capability.

These risks are not theoretical abstractions. The challenge is to integrate foreign partners within sovereign frameworks that ensure dependency does not become absolute. This requires contracts structured with safeguards, architectures that allow for sovereign override, and procurement that deliberately nurtures British innovation alongside global partnerships.