Trump Ally's $5bn Bet on Britain: Opportunity or Risk?

In the ever-shifting landscape of global investment, Larry Ellison, the world’s fifth-richest man and a key backer of Donald Trump, has made a bold move. His tech giant, Oracle, has vowed to invest $5 billion in Britain over the next five years, focusing on expanding its data centre infrastructure and helping more businesses adopt artificial intelligence (AI). This investment is a significant vote of confidence in the UK’s technological future, but it also raises questions about the potential risks and benefits in the current political and economic climate.



The UK, with its highly developed financial sector, strong services industry, and highly skilled workforce, is an attractive destination for international investment. Oracle’s investment aligns with the UK government’s priorities, particularly its focus on making it easier to build hyperscale data centres, which are essential for AI systems. This investment could lead to significant job creation and economic growth, as well as enhance the UK’s technological competitiveness and innovation ecosystem.

However, the current political and economic climate poses risks that could impact the realization of these benefits. Trump’s proposed corporate tax cuts could divert American investment away from the UK, where business tax remains at 25%. Economic modelling suggests that if Trump reduces US corporate tax to 14%, it could rapidly diminish American investment flows into Britain, potentially undermining the UK's position as a key destination for US capital.

Moreover, the ongoing trade tensions and tariff policies could impact the UK’s economy. The US is the UK’s largest trading partner, and higher tariffs could result in a 0.8% drop in GDP growth next year, resulting in a £21.5 billion loss to the economy by 2025. This could offset the benefits of Oracle’s investment.

The period between 2020 and 2023 has seen significant changes in the investment environment, with share prices fluctuating more consistently than at any point in the past decade. This uncertainty could affect Oracle’s investment plans and the overall economic benefits it brings to the UK.



In conclusion, while Larry Ellison’s $5bn investment through Oracle presents significant economic benefits for the UK, the current political and economic climate poses risks that could impact the realization of these benefits. The UK government must navigate these challenges carefully to ensure that Oracle’s investment delivers the promised benefits and enhances the country’s technological competitiveness and innovation ecosystem.