Politicians should have fought much harder to keep Arm in Britain, says ALEX BRUMMER

The emergence of Arm Holdings as a champion of artificial intelligence shows Britain’s ability to nurture high-tech winners.

The shame is that Theresa May’s government succumbed to the pleas of SoftBank’s Masayoshi Son in 2016 and the incumbents in Downing Street failed to convince Arm to list in London when it floated again last year came onto the market.

Now all the profits will go to New York and SoftBank, after an impressive update on Arm’s prospects.

As a brilliant designer of smart chips, Arm’s opportunities were always promising.

It’s one of the reasons US chipmaker Nvidia, which now has a market value of £1.4 trillion, wanted Arm’s coding skills and was a cornerstone investor when it went public.

Arm expects revenue and profit to far exceed expectations in the final quarter, amid rising licensing and royalty revenues thanks to its AI prowess.

CEO Rene Haas says it is taking advantage of the “profound opportunities” presented by the demand for new AI applications needed by the technology industry.

Arm is no longer largely a one-trick pony with most of its income coming from chips embedded in smartphones.

AI skills mean Arm-licensed processors are increasingly used with Nvidia graphics and devices like mobile phones and laptops.

The stock market’s reaction to Arm’s positive progress has been remarkable, with shares up 60 percent in last trading.

The shares have more than doubled from their price at the time of the IPO in September, when SoftBank held 90 percent of the shares.

Masayoshi Son will be pleased with how he managed to take Arm and its intellectual property, developed in Cambridge, out of Britain and buy back a 25 percent stake from the Saudi-backed Vision Fund before the IPO .

Much of the R&D and development of Arm architecture still takes place in Cambridge. But its effective headquarters have moved to the US and the lure of Silicon Valley is likely to be a skills vacuum cleaner as chip developers get closer to market.

Britain’s pale politicians should be ashamed of themselves for not fighting harder for an AI trendsetter who could have driven a technological revolution.

Lifelines

Poor is the one who got away. But thanks to former Chancellor George Osborne, who championed a sale to Pfizer, life sciences pioneer AstraZeneca remains firmly entrenched in Britain.

In 2021, pandemic hero CEO Pascal Soriot felt alienated enough to choose Ireland over Britain for a £285 million factory investment.

So it’s great that he changes his mind. He argues that the environment for big pharmaceutical companies in Britain has improved, pointing to investment-friendly tax policies (are you listening to the CBI?) and a better environment within the NHS for clinical trials.

Soriot always saw Brexit as an opportunity to use the NHS as a testing ground and for a strengthened MHRA (the British medical regulator) to steal a march on the sclerotic European regulator.

Astra shares fell in recent trading despite a surge in sales in the latest quarter.

The disappointment stemmed from higher-than-expected R&D spending and lower drug prices in emerging markets.

In my book, both are good events.

Its oncology drug portfolio continues to outperform most peers, with lung cancer treatment Tagrisso up 9 percent, leukemia drugs up 23 percent and gallbladder drug Imfinzi up as much as 55 percent.

The Astra also continues to do well in China, where many British companies encounter banana peels.

With a market value of £151 billion, it is vying with Shell for the top spot in the FTSE 100. Phew!

Speak your mind

Unilever’s new boss, Dutchman Hein Schumacher, is refreshingly honest about how performance needs to improve.

Its focus on innovation, as the leading consumer products group focuses on 30 brands, is promising.

New share buybacks worth £1.3 billion will be welcome. His inability to face geopolitical realities is more disappointing.

Unilever remains in Russia despite the war against Ukraine and Western values.

And he has failed to confront the board of ice cream brand Ben & Jerry’s with its calls for a permanent ceasefire in Gaza.

Courage, please.