Arm boss says lack of risk appetite ‘holding UK back’
The chief executive of British semiconductor company Arm has said the UK’s lack of risk appetite is holding businesses back.
Speaking on the Master Investor Podcast with Wilfred Frost, Rene Hass, who leads the Nasdaq-listed firm Arm holdings, said startups in the UK struggled to grow because of scale opportunities in the UK arising from the dearth of investors willing to bet on entrepreneurs.
“Scale matters – unfortunately, in this world, the UK is not at the scale that the US or China is,” Hass said.
“I’ve been very encouraged by some folks inside in the government, Peter Kyle [and] Liz Kendall. They’ve been very aggressive on this point, looking to do some things around data centres in the north.
“I think if we could get more venture capital inside the UK and then access even to secondary capital where people who want to start companies can do so in the UK and have their companies thrive in the UK, and obviously go public in the UK, that would be a home run on all levels.”
“There definitely is less appetite for risk and maybe that comes from less of an appetite for failing – whereas in Silicon Valley, if you fail to some degree, it’s a badge of honour.”
He suggested that he aimed to “inject some of that Silicon Valley appetite for risk” at the tech company’s headquarters in Cambridge.
Entrepreneurs to lose to tech giants in AI race
Hass also weighed in on AI bubble debates, playing down the risks posed to US tech giants such as Apple and Microsoft.
He suggested there may be some “overinvestment” in AI technology but added that models could “top out in terms of their efficiency”.
“One thing that may be a little different this time is that the past winners may still be the next set of winners just because of the size of their scale.”
However, Hass warned that China was better than the US at “building things really fast and moving through a lot of red tape”.
The microchip designer, which is owned by Masayoshi Son’s investment firm SoftBank, opted to snub the London Stock Exchange for New York in early 2023.
The decision came after intense negotiations between Hass, Rishi Sunak and the Financial Conduct Authority, dealing a blow to the UK’s ambitions of keeping its fastest growing companies at home.