UK taxpayer money, intended for public benefit, has been systematically channeled into the hands of US tech companies and venture capital groups, with Britain’s Advanced Research and Invention Agency (Aria) pledging £50m to foreign capital. This transfer represents more than an eighth of Aria’s total £400m research and development budget over the past two years, according to a joint investigation by the Guardian and Democracy for Sale.
The investigation found that this public funding has gone to 14 US tech companies and venture capital groups, in some cases with no clear return for the UK or Aria. Transparency disclosures reveal Aria spent £23m on nine US tech firms and an additional £6m on Normal Computing, a US company that established itself in the UK only weeks before receiving its grant.
Public Funds for Private Gain
Beyond direct tech firm funding, Aria allocated £29.4m to three US venture capital groups. These include Pillar VC, which received £10.9m, and Renaissance Philanthropy, backed by former Google CEO Eric Schmidt, which secured £13.3m. The CIC Venture Cafe Global Institute, a US business, received £5.4m to host entrepreneurial events, while the US firm Fifty Years was granted £7m to run a course teaching scientists how to start companies.
Several of these foreign entities demonstrated a pattern of incorporating in the UK immediately prior to receiving public funds. Pillar VC incorporated in the UK one day before Aria awarded its £10.9m contract, and Renaissance Philanthropy incorporated in the UK shortly before receiving its £13.3m from Aria.
Aria states its “mission is to unlock breakthroughs that benefit the UK,” yet its standard approach is not to take shares or intellectual property rights in the companies it funds. While Aria claims it requires a royalty fee on any IP commercialized outside the UK, this arrangement allows private entities to retain control over publicly funded innovations.
The speculative nature of these investments is underscored by the case of Rain Neuromorphics, a company backed by OpenAI chief executive Sam Altman, which was reported to be near collapse last year shortly after winning Aria money. Despite this, the Guardian understood it is still delivering a project for Aria.
The State as Capital's Steward
Cecilia Rikap, an economics professor at University College London, criticized the government's role, stating: “Disguised as promoting moonshot projects, the government is using taxpayer money to further expand the power of the US tech ecosystem.” Rikap added that this is “not a surprise coming from a government that has agreed to be not only Trump’s, but also big tech’s, footman.”
Rikap further elaborated that US tech companies operate as “intellectual monopolies that present themselves as contributing to public knowledge, all the while finding ways to monetise it.” She noted that “data and knowledge are co-produced with universities and local companies but always following the priorities of big tech, so that whatever new research is developed, it remains within the platforms and ecosystems that they control.”
Chi Onwurah, chair of the Commons science and technology committee, questioned how funding US-based venture capital and tech firms aligns with Aria’s mandate to benefit the UK. She highlighted the persistent regional imbalances in Aria's domestic funding, noting that the West Midlands, for example, receives only 0.8% of its allocations, while substantial investments are made overseas.
Concentration of Wealth, Not Innovation
When Aria was established, it was controversially exempt from freedom of information laws, and for its first years of operation, it published no details about its grantees. It remains unclear if Aria has strict guidelines on how much of its funding can go to non-UK businesses, facilitating a lack of public accountability for these transfers of collective resources.
An environmental group, ETC, described Aria as “bringing Silicon Valley’s free-market fundamentalism and its ‘move fast and break things’ ethos to disrupt the buttoned-up British science establishment.” This ideology underpins the agency’s approach to public funding.
Several of the US companies funded by Aria, such as MorphoAI and Sangtera, are early-stage ventures that already possess powerful US backers, including the incubator Y Combinator and the federal National Science Foundation. This indicates that UK public funds are supplementing existing private and state capital in the US tech sector.
Companies that received funding, including Normal Computing, Fifty Years, CIC, and MorphoAI, provided statements asserting their UK presence was a contractual condition or that they had reinvested funds, but these claims do not alter the fundamental transfer of public wealth to private, often foreign, capital.