London Daily

Focus on the big picture.
Saturday, Jul 05, 2025

Is the UK a bad place for tech firms?

Is the UK a bad place for tech firms?

Microsoft is seething.
Despite months of lobbying and negotiation, the UK's competition regulator ruled yesterday that the tech firm should not complete its proposed multi-billion dollar purchase of the games maker Activision Blizzard. It would have cemented Microsoft's status as a video game uber-giant.

If the UK, US and EU don't all approve the deal, it is very unlikely to be able to go ahead.

Neither Microsoft nor Activision have pulled any punches in their responses, with the former branding the decision "bad for Britain" and the latter saying "the UK is clearly closed for business".

Are they right?

The CMA doesn't think so - it says protecting the interests of businesses in Britain is intrinsic to its ruling.

The government would also say absolutely not.

Prime Minister Rishi Sunak recently spoke of "Unicorn Kingdom" - a unicorn is a firm worth more than $1bn without being listed on the stock exchange - and talked of an ad campaign targeting Silicon Valley investors.

I received a flurry of virtual raised eyebrows from various contacts about that - but fundamentally Sunak's vision of a prosperous UK has tech at the heart of it.

The body Tech Nation - which ironically lost its government funding in January after 10 years as a UK tech sector champion - valued UK tech firms at $1trillion, collectively, at the start of the year. Only the US and China have exceeded this milestone, it said.

Britain has a long history of being good at tech innovation. Radio, the telephone, the Enigma World War 2 code-breaking machine, Dolby surround sound, the World Wide Web - all UK-based inventions.

So where, then, is our Apple, our Google, our OpenAI?

I've been to the unkindly nicknamed Silicon Roundabout tech hub in east London, and the beautifully titled Silicon Glen in Scotland.

We have a handful of big successes - look at semiconductor firm Graphcore - and plenty of much smaller ones. But we are seriously lacking Silicon-Valley scale corporations which are also household names.

The UK had a considerable asset in the Cambridge-based chip designer Arm, but it now belongs to the Japanese firm Softbank, and this year will no longer be listed on the London stock exchange.

Deepmind, the hugely successful AI firm, is still UK-based but now belongs to Google.

I've interviewed countless tech start-ups here in the UK over the years. And often, although never on the record, I'll hear a similar ambition: they hope to get bought up by a US tech giant waving a huge cheque.

Some of them manage it. Sometimes the giant in question only actually wants a small part of the firm's intellectual property and winds the rest of it down at the earliest opportunity. That is of course not unique to either tech or the UK.

Everyone has a price, as the saying goes. But also, scaling up is hard.

Numerous entrepreneurs have told me that growing a company is a fragile time, because even though it appears to be doing well - there's more scrutiny, regulation, tax rules, workers are stretched, there may not be the immediate cashflow to balance the extra work and facilities having to be bought in.

On top of that, Brexit brought about the introduction of a new layer of operational issues to be navigated by all businesses, and the long anticipated Online Safety Bill comes with strict new rules for tech firms in that space, and large penalties for non-compliance.

One investor told me that while Britain is a good place to start, it's a much harder place to scale up.

Of course to an extent the same is true worldwide. For every Meta, there are thousands, maybe even millions of failed start-ups which burned through their funding and couldn't make it work.

You do also have to remember there is simply a lot more money in the US and, rightly or wrongly, less red tape.

Lots of people I speak to genuinely believe the UK has a chance to really punch above its weight in the rapidly accelerating AI revolution.

The government has introduced fairly light regulation for AI so far - stricter than the US but less strict than Europe - in the hope of allowing businesses to thrive.

There are currently more than 3,000 AI companies in the UK with a combined revenue of $10bn in 2022, according to official figures.

One idea doing the rounds in the UK tech scene is creating a "Britbot" - a British answer to OpenAI's viral AI chatbot ChatGPT and Google's Bard.

A faintly comical name, maybe, but the idea behind it is absolutely serious: perhaps there is an opportunity here for the UK to position itself with those at the front the race?

Just don't expect Microsoft to race to invest in it.
Newsletter

Related Articles

0:00
0:00
Close
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
×