Rene Haas says ‘less appetite for risk’ is holding tech startups back from scaling and is calling for more venture capital investment
ARM Holdings is one of Britain’s tech success stories(Image: ARM Holdings/PA Wire)
The chief executive of British semiconductor firm Arm has warned that the UK’s insufficient appetite for risk is hampering business growth.
Speaking on the Master Investor Podcast with Wilfred Frost, Rene Haas, who heads the Nasdaq-listed firm Arm Holdings, said start-ups in the UK struggled to expand because of limited scaling opportunities in the UK stemming from a shortage of investors prepared to back entrepreneurs.
“Scale matters – unfortunately, in this world, the UK is not at the scale that the US or China is,” Haas said, as reported by City AM.
“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.
Hass also commented on AI bubble debates, dismissing 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”.
He added: “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.”
Nevertheless, Hass cautioned that China was superior to 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, chose to bypass the London Stock Exchange in favour of New York in early 2023.
The move followed intensive negotiations between Hass, Rishi Sunak and the Financial Conduct Authority, delivering a setback to the UK’s aspirations of retaining its fastest-growing companies domestically.