Business Secretary Reflects on ARM Holdings Sale
Business Secretary Peter Kyle stated that he would have intervened to prevent the sale of the UK microchip company ARM Holdings if he had been in government at the time of the transaction.
ARM Holdings, once regarded as a crown jewel of UK technology, was acquired by the Japanese company Softbank in 2016 and subsequently listed on the New York Stock Exchange in 2023.
Kyle told the BBC that ARM Holdings could have become the largest firm on the London Stock Exchange had it remained in the UK. He added that
"it would be 40% of the way there to the trillion-dollar company I think our country needs".
His remarks coincide with the government’s announcement of plans to support British technology companies, as major US tech firms such as SpaceX, Anthropic, and OpenAI prepare for significant share sales in New York.
ARM Holdings’ Transition and Value Growth
Based in Cambridge, ARM Holdings was listed on the London Stock Exchange until its acquisition by Softbank a decade ago for £24 billion ($32 billion). The company is now listed on the New York Stock Exchange and has a valuation of approximately £285 billion ($380 billion).
Kyle also expressed regret over the acquisition of the UK-based AI company DeepMind by Google in 2014. He noted that although DeepMind continues to operate in the UK,
"the wealth that it has created is going elsewhere".
Government Initiatives to Support UK Tech Firms
Speaking during London Tech Week, Kyle outlined several government initiatives aimed at attracting and retaining fast-growing technology companies within the UK.
"We need to learn from these experiences,"he said.
"Now, what I don't want to do is be interventionist in a way that I'm just using the powers I have to block: what I do want to do is create the circumstances where they do not want to leave in the first place,"he added.
The Business Secretary indicated that the government is prepared to increase investments of taxpayer money in promising companies and establish a cross-government concierge service to assist companies in obtaining skills, finance, and support.
"I've upped the risk threshold,"Kyle said.
"There are two risks. The first is that we get so slowed down by caution and anxiety about AI that we don't embrace and shape it. The other risk is that we embrace and shape it and get some things wrong – I choose to take the latter."
The government has recently announced substantial public investments in the energy software company Kraken, the self-driving firm Wayve, and a UK tech-focused investment fund, Playground Global.
Challenges in Other Sectors and Workforce Concerns
While technology firms may benefit from government support, Kyle acknowledged that other sectors are facing difficulties, particularly hospitality, which has been affected by sharp increases in the national living wage and employers' national insurance contributions.
"Hospitality is stressed and I understand that,"he said, referencing the government’s recent decision to phase in business rate increases for pubs more gradually than initially planned.
Former Health Secretary Alan Milburn recently warned of a "lost generation" of young workers, as the number of individuals not in employment, education, or training (NEETs) surpassed one million for the first time since the aftermath of the financial crisis.
Kyle acknowledged these challenges, stating,
"I accept there are structural challenges to the way young people enter the workforce. I accept that. Alan Milburn has done his analysis of the problem. We are working closely with Alan to see what actions we can take to tackle this,"he said.
