Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Welcome to in the City.
Speaker 1: Each week we unpack a story that's crucial to the
Speaker 1: world's financial capitals and Francin Lacua Now. London has long
Speaker 1: prided itself on being a global tech hub, but that
Speaker 1: reputation is starting to falter. Revolute, for example, is considering
Speaker 1: a listing in New York, pointing to low valuations and
Speaker 1: limited liquidity in the UK market. Meanwhile, Wise, the twelve
Speaker 1: billion pound money transfer company is shifting its primary listing
Speaker 1: to the US. So these developments are flashing warning signs
Speaker 1: for British lawmakers, but also raising serious questions about London's
Speaker 1: ambitions as a tech capital. Welcome to the City of London,
Speaker 1: The City of the City.
Speaker 2: The City of London Bank. We need mind the gap
Speaker 2: between the tram and the financial hearts of the country,
Speaker 2: the City, the City.
Speaker 3: Welcome to in the City, stand care of the doors.
Speaker 1: In this episode, we'll dig into what's behind the shift
Speaker 1: and why some of the UK's leading fintech firms are
Speaker 1: turning away from London while the city keeps pushing this
Speaker 1: image of itself as a booming tech capital. Well to
Speaker 1: help us unpack it all. I'm delighted to be joined
Speaker 1: by Amy Thompson, Bloomberg's tech team leader for ea AM.
Speaker 1: I'm so happy you're here to make sense of all
Speaker 1: of this.
Speaker 3: Hi, thanks for having me.
Speaker 1: How's the UK doing. We're in the middle of London
Speaker 1: Tech Week. Last week for the first time we had
Speaker 1: south By Southwest who had pretty cool speakers. It generated
Speaker 1: a little bit of a buzz. But is it attracting money?
Speaker 3: I mean, London as a tech hub in Europe is
Speaker 3: still the biggest. It's still where you should be if
Speaker 3: you're startup or scale up in Europe. So where the
Speaker 3: venture capital money is, where the private equity capital is
Speaker 3: so yes. But as far as tech conferences go, there
Speaker 3: is the long standing rivalry between London Tech Week and
Speaker 3: Viva Tech, which kicks off on Thursday. So I think
Speaker 3: it'll be interesting to compare the buzz between the two.
Speaker 1: This year I moderated a couple things at south By
Speaker 1: Southwest and people are saying, where are you from? Are
Speaker 1: you from London? Is there a correlation between like conferences
Speaker 1: and attracting money or is it just because people like
Speaker 1: to come to London because London has a good infrastructure
Speaker 1: and again, it creates a buzz, but there's not necessarily
Speaker 1: capital being deployed on the back of that.
Speaker 3: Oh that's tricky. I mean, I think the London conferences
Speaker 3: will have the Like you said, the big London vidtechs
Speaker 3: more likely to show up. But for what it's worth,
Speaker 3: Viva Tech seems to be the buzzier, the buzzier show.
Speaker 3: I think they had Elon Musks show up last year.
Speaker 3: Jensen Wang heereed at London Tech Week on Monday, but
Speaker 3: he's going to be at Viva Tech again on Thursday,
Speaker 3: and that's where Nvidia is also having it's its own
Speaker 3: meeting on the sidelines. We've got a lot of Open
Speaker 3: Eye executives going to VivaTech, so that seems to be
Speaker 3: drawing more of the international crowd.
Speaker 1: Is it a good bad thing that Elon Musk doesn't
Speaker 1: come to London. He's been so vocally against UK regulations
Speaker 1: some of the things that the UK has been doing,
Speaker 1: also for hate messages online. I mean he's a little
Speaker 1: bit obsessed with the UK.
Speaker 3: Yeah, a lot of the online safety legislation that's come
Speaker 3: out in the UK has made x for example, pretty vulnerable.
Speaker 3: But that said, he's no fan of European regulations either.
Speaker 3: So I'd like to think we're equally in the doghouse
Speaker 3: when it comes to Elon Musk.
Speaker 1: You mentioned the Nvidia CEO. He's the person at the
Speaker 1: moment that everybody wants to speak to. He was on
Speaker 1: stage with Cure Starmer on Monday and London Tech Week.
Speaker 1: Were we expecting a bit of money being put to
Speaker 1: a lot of projects.
Speaker 3: Yeah, we had all sorts of conspiracy theories ahead of
Speaker 3: Jensen's adherence. Don't think that money was on skills up.
Speaker 3: I think maybe we're hoping for an enormous data center
Speaker 3: or something like that. But you know, his interest in
Speaker 3: the UK is nice, he called us. I think gordilux
Speaker 3: circumstance between these two ideas that you're rich with great
Speaker 3: computer scientists.
Speaker 2: It's a fantastic place for vcs to invest. The ecosystem
Speaker 2: is really perfect for takeoff.
Speaker 3: We've got the companies, we've got the people, we've got
Speaker 3: the universities, just don't have the compute. And then Cure
Speaker 3: Starmer announced that the country would be spending an additional
Speaker 3: one billion pounds on Compute.
Speaker 2: Our ambition that we are determined to be the best
Speaker 2: state partner for tech entrepreneurs anywhere in the world. That's
Speaker 2: the bar, that's the ambition that I've set for my government,
Speaker 2: and so on that front, I can announce today also
Speaker 2: that we're committing an extra one billion pounds worth of
Speaker 2: funding to scale up our compute power by a factor
Speaker 2: of twenty. Now, you know how important that.
Speaker 3: I don't know if this is fair, but I couldn't
Speaker 3: help but think at the moment of the five hundred
Speaker 3: billion that the US was just talking about, or you know,
Speaker 3: the UAE saying that it was going to build a
Speaker 3: five gigawat data center, which could easily be in the
Speaker 3: tens of billions, and who knows if we'll ever see
Speaker 3: like those numbers realized. But a billion pounds at a
Speaker 3: moment like this, I think that's a little deflated.
Speaker 1: Is this government really committed to putting tech and AI
Speaker 1: as a priority?
Speaker 3: I mean, it's hard to tell. We were talking a
Speaker 3: little bit more about how the one billion AI pledge
Speaker 3: sounds so much like the one billion semiconductor pledge under
Speaker 3: the SUNet government, and how that felt very too little,
Speaker 3: too late, and this feels very much the same. So
Speaker 3: it is it is a problem of a government that
Speaker 3: doesn't necessarily have a huge budget for this sort of thing,
Speaker 3: doesn't have a lot of giant companies that are coming
Speaker 3: to sort of pledge money to sort of placate a
Speaker 3: Trump figure, for example, doesn't really have that kind of
Speaker 3: pull trying to create an ecosystem around some of these companies.
Speaker 1: I mean, what makes actually a great center for tech
Speaker 1: because you need the infrastructure, you need the power, you
Speaker 1: need the programmers. At the moment, yeah, is also a
Speaker 1: lot of money being spent without knowing yet who comes top, right,
Speaker 1: So you can't really tell the winner. Will you have
Speaker 1: a winner takes all in tech? You know, is there
Speaker 1: a chance that they're based in London or does it
Speaker 1: not matter?
Speaker 3: I mean, as far as the AI race is concerned,
Speaker 3: I don't think the companies really care where they're based.
Speaker 3: They just want to go where they can get the compute.
Speaker 3: They want to go where they can get the investors,
Speaker 3: and if that's the US, which it historically is, that's
Speaker 3: where they'll go. Because it does feel like you're going
Speaker 3: to have a couple of giant tech companies that are
Speaker 3: going to dominate this race. It'll be Meta and Zuckerberg's
Speaker 3: new brain trust, It'll be open Ai and Sam Altman.
Speaker 3: It'll be a company that can get to a scale
Speaker 3: where everybody needs to use it and everybody needs to
Speaker 3: have it as part of its infrastructure. And if that
Speaker 3: can happen in the US, that's where they're going to go.
Speaker 3: I think the only people who really care where the
Speaker 3: headquarters are a politicians to journalists. The companies themselves are
Speaker 3: just going to follow the resources most likely, And as
Speaker 3: far as London goes, I think a lot of people
Speaker 3: would agree with the Nvidia CEO that we do have
Speaker 3: amazing universities, an amazing talent, and really cool companies that
Speaker 3: start here. But when they get to sort of the
Speaker 3: scale up phase, or they're thinking about a listing, or
Speaker 3: they're ready to get really really huge, a big tech
Speaker 3: company buys them, or they move their headquarters to the US.
Speaker 3: They've listed here, they move their listing to the US
Speaker 3: just because that's where the investment.
Speaker 1: Is the US. Is it just because they have more
Speaker 1: liquid capital markets? So is it a problem of the
Speaker 1: stock exchange and courses instead of a politicians problem?
Speaker 3: Yeah, there's definitely some of that. There was a really
Speaker 3: interesting story that I was reading in Blueberg about what
Speaker 3: happened to the IPO market and how that's affected Europe.
Speaker 3: After COVID. There's a huge downswing in IPOs all over
Speaker 3: the world, but particularly lately in Europe. And one of
Speaker 3: the things we're arguing is that IPOs sort of get IPOs.
Speaker 3: You have a lot of high profile listing thing that
Speaker 3: attracts investors, That attracts people who are knowledgeable about your industry,
Speaker 3: who are willing to take a bigger bet on it,
Speaker 3: higher valuations, etc.
Speaker 2: Etc.
Speaker 3: So if New York is getting all of the big
Speaker 3: tech listings, that's where all the investors are going to
Speaker 3: be paying attention. That's where people are going to be
Speaker 3: willing to give you a higher evaluation for your company.
Speaker 3: I mean, we've.
Speaker 1: Spoken with chief executives that say, look, we like London,
Speaker 1: but actually, if you're publicly listed, you have a lot
Speaker 1: more scrutiny on a lot of things that even if
Speaker 1: you're transparent and you're doing fine, you may not want
Speaker 1: to put the spotlight on regulation, I imagine is a
Speaker 1: big concern if you're listed here. Does Trump attract tech
Speaker 1: IPOs to the US.
Speaker 3: I don't know if it's a Trump thing. It's just
Speaker 3: historically the US has been where you go to list
Speaker 3: if you're a tech company, because that's for the investor
Speaker 3: base is I think there is definitely a conversation about
Speaker 3: whether some companies are going to bother listing at all
Speaker 3: these days, especially with the IPO market having been solo
Speaker 3: for so long. There's a lot more private capital at
Speaker 3: work now, so it's possible opening is massive and they're
Speaker 3: not public, they haven't needed to go to the public markets,
Speaker 3: so I think that might be the other side of
Speaker 3: the argument. I don't really think that the regulations have
Speaker 3: changed so much under Trump and under the new EU
Speaker 3: administration that it would sway anybody one way or the other.
Speaker 1: If you don't want to go public, you're you know,
Speaker 1: either get bought by private equity, or you get bought
Speaker 1: by a big tech company, or you're flying solo in private.
Speaker 1: Do you see a preference from chief executives or does
Speaker 1: it really depend on the space you operate in.
Speaker 3: I think it depends on the space. You've had. Sort
Speaker 3: of mid sized companies tend to get folded into the
Speaker 3: bigger tech companies, like we've read about Qualcom buying one
Speaker 3: of our London listed tech companies, Alpha Wave. They make
Speaker 3: semiconductor technology that's particularly useful for AI and data centers,
Speaker 3: which is really hot right now, and Qualcom's obviously been
Speaker 3: interested in it. So you have sort of the big
Speaker 3: tech coming and swooping in and buying you out. But
Speaker 3: also there are huge pools of capital. You've got money
Speaker 3: coming out of DAE for example, Saudi funds that are
Speaker 3: just focused on AI and tech that are worth tens
Speaker 3: of billions, so you know there's money to be had
Speaker 3: and you can still keep control of your company and
Speaker 3: not necessarily do a financial report every quarter.
Speaker 1: Who's London's biggest rival for the tech scene? Definitely the US?
Speaker 1: Or is there a European We talked a lot about
Speaker 1: viv Tech in Paris. You were telling me also Germany
Speaker 1: has some really cool startups, but are they big enough or.
Speaker 3: Yeah, I mean, as far as buzz I guess we're talking.
Speaker 3: The US and China are on a different scale. Who's
Speaker 3: on the same playing field as London? I'd say probably
Speaker 3: France and Germany are doing some really cool things in
Speaker 3: tech right now. We just put out a list of
Speaker 3: twenty five European startups with Founders Forum that went out
Speaker 3: earlier this week and saw people from all over Europe,
Speaker 3: but a lot of the concentration was UK, France and Germany.
Speaker 1: What are you most excited about. Is there a space
Speaker 1: in tech that you think has been overlooked that is
Speaker 1: crucial to getting it done.
Speaker 2: Yeah.
Speaker 3: I think one of the really interesting spaces for Europe
Speaker 3: right now is defense tech. So if you look at
Speaker 3: a company like Helsing, they're never going to go to
Speaker 3: the US because part of their selling point is sovereignty
Speaker 3: and that's become so important now because of the way
Speaker 3: the geopolitics are changing in Europe. They're attracting a lot
Speaker 3: of investment, a lot of interest. Their drones are used
Speaker 3: in Ukraine. I think they have agreements with the German government.
Speaker 3: So companies that can help Europe meet its goals of
Speaker 3: becoming more independent, taking more control over their own defense
Speaker 3: I think will be really really interesting to watch this year.
Speaker 1: Amy, thank you so much for joining us.
Speaker 3: Thanks very much, thanks.
Speaker 1: For listening to this episode of In the City from Bloomberg.
Speaker 1: This episode was hosted by me Francin Laquin. It was
Speaker 1: produced by Summersaudi Mosses and and Tala Maddi. Brendan Francis
Speaker 1: Newnham is our executive producer. Special thanks to Amy Thompson,
Speaker 1: Please subscribe, write and review wherever you listen to podcasts.