Sir Alex Younger, the former head of Britain’s MI6 secret service, has weighed in on the political and corporate battle over Arm Holdings’ future home, saying the UK government needs to “tighten every tendon” to ensure it that the world-beating chip designer stayed in the UK.
Announcement of the billionaire director of SoftBank Masayoshi Son caused a wave of anger in the UK about the impotence of the nation to retain homegrown industry leaders. There are also concerns about the concentration of power in the global semiconductor industry, which is at the heart of the technology arms race between the US, Asia and Europe.
Younger told the Financial Times that Britain’s “future security depends on our ability to maintain and develop a strong science and technology foundation”, adding that “a market failure” has caused Many British technology companies skip the London stock exchange to move to New York.
“Don’t strain every tendon to come up with at least a double list [of Arm in the UK and US] would send a sad message to those of us who believe that the existence of a few truly global tech companies in the UK will radically change our outlook and that of our children. us,” said the former spy.
“There is a direct security and military aspect to this. But more important is the economic power it generates,” he added.
Rene Haas, Arm’s new chief executive, told the Financial Times the company hasn’t “made any decisions” on which country it will list in: “We’re looking at all options. .” Hass added that he is eager to complete the listing by the end of 2022 – “if not sooner”.
SoftBank’s son has argued for Arm listing on the Nasdaq exchange, where it is likely to achieve a higher valuation: New York is known for being friendly with tech IPOs and more liquid as well as more knowledgeable analysts and investors.
Arm sold to SoftBank for $32 billion shortly after the shock Brexit referendum in 2016, when the deal was hailed by Theresa May’s government as a sign of Britain’s global appeal.
The company was founded in Cambridge in 1990 and its specialized chip designs are found in about 99% of smartphones worldwide. But its biggest customer is in the US. Most of the company’s executive team is based in the US – leading many to question whether it can be called a UK company.
“With a proposed valuation of over $60 billion, Arm will be among the top 10 companies listed on the LSE, so it should come as no surprise that it will seek deeper sources of capital in the US, ” said Stuart Andrews, managing director and head of capital markets at FinnCap Group.
The UK Treasury has so far asked British ministers not to comment on the collapse of the Nvidia-Arm Holdings deal, according to people close to the discussions. Instead, senior figures plan to make a decision privately to SoftBank about the benefits of listing in London.
The Treasury Department, the Cabinet Office, the business division (BEIS), the commerce ministry, the National Security Council and the cultural division (DCMS) participated in the discussions, according to officials.
A single US listing would thwart Britain’s plans to create a thriving local tech scene, as well as counter the security concerns that have plagued many countries with the subject. technology rights.
In the UK, the government has banned the use of chips made by China’s Huawei in the UK’s 5G mobile infrastructure. Last year, it put technology at the heart Improved defense strategyearned £6.6 billion to create a ‘lasting military advantage’ in high-tech areas such as space, lasers and advanced high-speed rockets.
Others have argued for drastic intervention. Hermann Hauser, co-founder of Arm, suggests that the government should also take a strategic stake as a “gold stake” in the company as part of a national security strategy.
Younger added: “We can’t just rely on the market to create the capability we need. Government policy should reflect this reality. Public-private partnerships must be part of the future. The aversion to picking winners does not excuse the absence of an active industry strategy.”
He quoted pioneer in selling artificial intelligence DeepMind came to Google in 2014 for $500 million — a price now considered a bargain by many. “Arm [and] DeepMind are great companies,” Younger said. “We have to find a way for their successors to see the decision to stay at home as unquestionable.”