‘We’ve got lots of things going for us America doesn’t’ – Sadiq Khan on competing with Silicon Valley

Sir Sadiq Khan pointed to the uncertainty around Donald Trump’s presidency as a reason a lot of Americans want to come to London

Sadiq Khan has claimed that shifting political dynamics in the US are actively driving tech talent and venture capital to the UK, arguing that London possesses structural and cultural advantages that “America doesn’t” as he seeks to position the capital against Silicon Valley.

The Mayor of London announced a new £12m investment programme on Monday at London Tech Week, targeting AI adoption among the city’s one million small and medium-sized enterprises (SMEs).

The three-year initiative arrives amid a record turnout of 30,000 international attendees, which Khan suggested reflects a growing global appetite for the UK capital over its traditional American rivals.

“Silicon Valley is great – it’s one of its kind,” Khan told City AM. “But I think we’re on the shoulders of New York when it comes to our ability to compete. And we’ve got lots and lots of things going for us that America doesn’t. We know big numbers of Americans coming here to study, to live, to invest.”

The Mayor pointed to shifting sentiment under the Trump presidency – including tariff uncertainties and a tightening international research environment – as an immediate catalyst for the influx of North American capital.

His comments follow a string of major commercial commitments at Olympia, including a $2bn (£1.73bn) investment by Advanced Micro Devices (AMD) over the next five years, alongside aggressive London expansions by US tech behemoths OpenAI and Anthropic.

Maintaining this competitive edge relies entirely on the capital remaining an attractive destination for highly mobile international developers and founders.

“Our USP is our talent pool,” Khan said. “We’ve got to have a good, sophisticated immigration policy as well because, basically, talent is very mobile. You could go anywhere – Lisbon, Milan, Silicon Valley. Why London? People want to come here because we’ve got great music, great culture, great nightlife, great restaurants, and diversity. Harry Styles is a catch.”

Fixing SMEs’ AI skills gap

While blue-chip multinationals continue to anchor their European operations in London, City Hall data highlights a steep digital divide at the base of the local economy.

While the capital has minted 12 new unicorns and drawn $12bn in tech investment this year alone, fewer than one in six of London’s one million small businesses currently utilise any form of AI.

“My nervousness is that there are not enough businesses taking advantage of AI,” Khan said. “I don’t think it’s going to be a question of people being replaced by AI. I think it’ll be businesses that use AI doing well, businesses that don’t use AI doing less well.”

The newly announced £12m funding package, overseen by a digital task force under Baroness Martha Lane Fox, will deliver online and face-to-face training to help smaller businesses adopt the technology.

“Small businesses haven’t got the time,” he said. “How do you free up your only other member of staff to go training? How do you make time for training when you’re serving your customers? We’ve got to make it as easy as possible.”

Khan argued that London’s broader advantage lies in its industrial density, or “agglomeration” – the unique concentration of professional services, legal sectors, finance, and life sciences operating in close proximity.

This density is increasingly being leveraged by the public sector, with TfL using AI for traffic signalling, the London Fire Brigade deploying predictive wildfire modelling, and local authorities installing dampness sensors in social housing.

“At a time of finite resources, we can find a rationing of resources far better,” Khan said. “Why can’t a quality of service you receive from the public sector be as good as a quality of service you receive from the private sector?”

Regulatory friction

The mayor’s emphasis on tight municipal oversight follows recent friction with US tech providers over public contracts.

Khan recently blocked a proposed £50m intelligence-processing deal between the Met police and Palantir, the US data analytics titan co-founded by billionaire Peter Thiel, citing a clear breach of procurement guidelines.

The move drew fierce criticism from Palantir’s UK head, Louis Mosley, who accused City Hall of prioritising politics over public safety.

The row intensified after a separate £9m national contract was awarded to Palantir to digitalise the UK’s National Firearms Licensing Management System across all 43 regional forces, effectively bypassing the Mayor’s localised ban.

“People want certainty,” Khan told City AM. “They want to know: what are the guardrails, what are the rules when it comes to us using our technology? AI doesn’t exist in a vacuum. I’m not evangelical about AI to the extent where I don’t understand the importance of having rules in play.”

This willingness to step ahead of national policy is reflected in Khan’s latest campaign for an outright ban on social media access for individuals under the age of 16.

The hardline stance places him ahead of Prime Minister Keir Starmer, whose administration recently concluded a consultation on youth online safety without committing to full restrictions.

Comparing tech algorithms to heavily regulated consumer markets, Khan insisted that platforms must bear the burden of proof before operating in the UK.

“We wouldn’t allow food to be sold unless it’s safe. We wouldn’t allow pharmaceuticals to be sold unless it’s safe,” Khan said. “I think the big tech companies need to show it’s safe. It’s not safe. Ban under-16s to protect them.”

The mayor is currently seeking to scale this regulated approach internationally through the Mayors’ AI Forum, an alliance representing seven global cities across five continents.

“I think cities will move faster than countries,” Khan said. “I think mayors are far more nimble and can move far faster than presidents and prime ministers. There are those who are AI evangelists, there are those who are AI alarmists – I want to be an AI realist.”

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