London Daily

Focus on the big picture.
Tuesday, May 20, 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
Russia Expands Military Presence Near Finland Amid Rising Tensions
Indian Scholar Arrested in Crackdown Over Pakistan Conflict Commentary
Ontario Manufacturers Warn U.S. Tariffs Could Create Economic 'Ghost Town'
UK and EU Reach Landmark Post-Brexit Deal to Reset Relations
Israel Eases Gaza Blockade Amid Internal Dispute Over Military Strategy
President Biden’s announcement of advanced prostate cancer sparked public sympathy—but behind closed doors, Democrats are in panic
Trump Demands Probe into Kamala Harris for Paying Celebs to Fake Endorsements
At Age 92, the World’s Oldest President Has No Succession Plan — and That Could Spark a Crisis
U.S. Concerns Mount Over Chinese 'Kill Switch' Components Found in Solar Power Infrastructure
Bipartisan Criticism Surrounds Trump's Cryptocurrency Ventures
Diplomatic Efforts on the Russia-Ukraine Conflict
Mexican Navy Ship Collides with Brooklyn Bridge, Injuries Reported
A Chinese company made solar tiles that look way nicer than regular panels!
U.S. and Philippine Forces Test High-Powered Microwave Weapons in Joint Exercise
China Unveils Advanced AI Surveillance Tools at 12th Police Equipment Expo
Japan's Three Major Banks Report Record High Net Profits for Second Consecutive Year
The Chinese Dragon: The True Winner in the India-Pakistan Clash
US and EU Make Progress in Trade Talks, While Vietnam Negotiations Also Advance
Sean 'Diddy' Combs Trial: Ex-Girlfriend Cassie Ventura Testifies About Alleged Abuse
Former Wales Rugby Star Jamie Roberts to Pursue Medical Career
Australia's Venomous Creatures Contribute to Life-Saving Antivenom Programme
Passenger Travels Under Wrong Identity on British Airways Flight
Former FBI Director James Comey Questioned by Secret Service Over Social Media Post
The Spanish Were Right: Long Working Hours Harm Brain Function
After 108 Years: Moody’s Downgrades U.S. Credit Rating
Did Former FBI Director Call for Violence Against Trump? Instagram Post Sparks Uproar
US and UAE Partner to Develop Massive AI Data Center Complex
Russia and Ukraine Hold First Direct Peace Talks in Three Years — But No Breakthrough Yet
Apple's $95 Million Siri Settlement: Eligible Users Have Until July 2 to File Claims
US and UAE Reach Preliminary Agreement on Nvidia AI Chip Imports
KREMLIN has just approved Senator ALEXANDER " THE EXPERIMENT" KARELIN, of Novosibrisk, as Chief Negotiator at the Meeting in ISTANBUL with Ukraine & USA.
Shocking Footage Released: Diddy Caught Dragging Cassie in Brutal Hotel Hallway Assault
Starlink Now Profitable: SpaceX Hits Major Milestone with $11.8 Billion in Revenue
Portuguese Right-Wing Leader Collapses During Campaign Rally
A Pakistani imam in Italy gave a sermon stating that every Muslim should fight the infidels or face ‘catastrophic consequences’.
President Trump and Elon Musk Welcomed by Emir of Qatar Sheikh Tamim with Cybertruck Convoy
EU Court Orders Disclosure of von der Leyen’s Texts with Pfizer CEO Over €35 Billion Vaccine Deal
Strong Warning Issued: Do Not Use General Chatbots for Medical, Legal, or Educational Guidance
Saudi Arabia Emerges as Global Tech Magnet with U.S. Backing and Trump’s Visit
Mexican Influencer Valeria Márquez Killed During Livestream in Suspected Femicide
This man went to take $5,000 out his own bank account and was arrested for it
This was President's departure from Saudi Arabia. The Crown Prince personally escorted him back to the airport.
CIA Files Reveal Klaus Barbie's Role in Bolivian Drug Trade and Dictatorship Support
Daughter of crypto boss escapes Paris kidnap in latest in series of attacks
U.S. FDA to Remove Oral Fluoride Supplements for Children Amid Gut Health Concerns
Kim Kardashian Testifies in Paris Robbery Trial, Tells Gang Leader: 'I Forgive You'
NVIDIA and Saudi Arabia Launch Strategic Partnership to Establish AI Centers
Challenges Facing EU Foreign Policy Amidst Diverging Interests
Reports Reveal Alarming Cognitive Decline in Biden Prior to Election Withdrawal
Trump Meets Syrian President Ahmad al-Shara in Historic Encounter
×