London Daily

Focus on the big picture.
Thursday, Sep 04, 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
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Queen Camilla’s Teenage Courage: Fended Off Attempted Assault on London Train, New Biography Reveals
Scottish Brothers Set Record in Historic Pacific Row
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
Couple celebrates 80th wedding anniversary at assisted living facility in Lancaster
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
The White House on LinkedIn Has Changed Their Profile Picture to Donald Trump
"Insulted the Prophet Muhammad": Woman Burned Alive by Angry Mob in Niger State, Nigeria
Trump Responds to Death Rumors – Announces 'Missile City'
Court of Appeal Allows Asylum Seekers to Remain at Essex Hotel Amid Local Tax Boycott Threats
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
Nvidia Reveals: Two Mystery Customers Account for About 40% of Revenue
Woody Allen: "I Would Be Happy to Direct Trump Again in a Film"
Pickles are the latest craze among Generation Z in the United States.
Deadline Day Delivers Record £125m Isak Move and Donnarumma to City
Nestlé Removes CEO Laurent Freixe Following Undisclosed Relationship with Subordinate
Giuliani Seriously Injured in Accident – Trump to Award Him the Presidential Medal of Freedom
EU is getting aggressive: Four AfD Candidates Die Unexpectedly Ahead of North Rhine-Westphalia Local Elections
Lula and Putin Hold Strategic BRICS Discussions Ahead of Trump–Putin Summit
WhatsApp is rolling out a feature that looks a lot like Telegram.
Investigations Reveal Rise in ‘Sex-for-Rent’ Listings Across Canada Exploiting Vulnerable Tenants
Chinese and Indian Leaders Pursue Amity Amid Global Shifts
European Union Plans for Ukraine Deployment
ECB Warns Against Inflation Complacency
Concerns Over North Cyprus Casino Development
Shipping Companies Look Beyond Chinese Finance
Rural Exodus Fueling European Wildfires
China Hosts Major Security Meeting
Chinese Police Successfully Recover Family's Savings from Livestream Purchases
Germany Marks a Decade Since Migrant Wave with Divisions, Success Stories, and Political Shifts
Liverpool Defeat Arsenal 1–0 with Szoboszlai Free-Kick to Stay Top of Premier League
Prince Harry and King Charles to Meet in First Reunion After 20 Months
Chinese Stock Market Rally Fueled by Domestic Investors
×