Politics that failed UK tech
THE emergence of Arm holdings as an Artificial Intelligence champion shows that Britain is capable of nurturing hightech winners. The shame is that Theresa May’s government succumbed to the entreaties of Masayoshi Son of SoftBank in 2016 and the incumbents on Downing Street failed to persuade Arm to list in London when it refloated last year.
Now, all the spoils accrue to New York and SoftBank, following an impressive update on Arm’s prospects. As a brilliant designer of smart chips, the opportunities for Arm were always promising.
It is among the reasons that US chip maker Nvidia, which now has a market value of £1.4trillion, wanted Arm’s coding skills and was a cornerstone investor when it floated. Arm forecast final quarter sales and profits way above expectations amid soaring licensing and royalty revenues on the back of its AI skills.
Chief executive Rene haas says it is benefiting from the ‘profound opportunity’ presented by the demand for new AI applications required by the tech industry.
No longer is Arm largely a one-trick pony with most of its income derived from chips embedded in smartphones. AI skills mean Arm-licensed processors increasingly are being used with Nvidia graphics and devices such as mobile phones and laptops.
The stock market response to Arm’s upbeat progress was remarkable, with the shares rocketing 60pc in latest trading.
Its shares have more than doubled from the price at the time of the September initial public offering when SoftBank hung on to 90pc of the stock.
Masayoshi Son will be gleeful at how he managed to whisk Arm and its intellectual property, developed in Cambridge, away from the UK and buy back a 25pc stake from the Saudi Arabia-backed Vision Fund before the float.
Much of the R&D and development of
Arm architecture is still in Cambridge. But the effective hQ moved to the US and the temptation of Silicon Valley is likely to be a vacuum cleaner for skills as chip developers move closer to market.
Britain’s pallid politicians should hang their heads in shame for not fighting harder for an AI trendsetter which could have propelled a tech revolution.
Life lines
ARM is the one that got away. But no thanks to former chancellor George Osborne, who favoured a sale to Pfizer, life sciences pioneer AstraZeneca remains firmly implanted in the UK.
In 2021 chief executive Pascal Soriot, hero of the pandemic, felt sufficiently alienated to choose Ireland over the UK for a £285m plant investment.
So it is terrific that he is changing his mind. he argues that the environment for big pharma in the UK has improved, pointing to investment-friendly tax policies (are you listening CBI?) and a better climate within the NhS for clinical trials.
Soriot always saw Brexit as an opportunity to use the NhS as a test bed and for an enhanced MhRA (the UK’s medical regulator) to steal a march on the sclerotic european regulator.
Astra shares slipped in latest trading in spite of a pick-up in final-quarter sales. The disappointment stemmed from higherthan-expected R&D spend and lower prices for medicines in emerging markets.
In my book, both are good happenings. The portfolio of oncology drugs continues to outperform most peers with sales of lung cancer treatment tagrisso up 9pc, leukaemia medicine calquence up 23pc and gall bladder drug imfinzi up a whopping 55pc.
Astra also continues to perform well in China where many UK firms have encountered banana skins.
With a market value of £151bn, it vies with Shell for top slot in the FTSe 100. Phew!
Speak up
UNILeVeR’S new boss, Dutchman hein Schumacher is refreshingly honest about how performance needs to improve.
his focus on innovation, as the leadingedge consumer products group concentrates on 30 brands, is auspicious.
New share buybacks worth £1.3bn will be welcome. his failure to confront geopolitical realities is more disappointing.
Unilever remains in Russia in spite of its war on Ukraine and Western values.
And he has failed to confront the board of ice cream brand Ben & Jerry’s over its calls for a permanent ceasefire in Gaza.
Courage, please.