Bloomberg Audio Studios, Podcasts, Radio News.

Welcome to in the City.

Each week we unpack a story that's crucial to the world's financial capitals and Francin Lacua Now.

London has long prided itself on being a global tech hub, but that reputation is starting to falter.

Revolute, for example, is considering a listing in New York, pointing to low valuations and limited liquidity in the UK market.

Meanwhile, Wise, the twelve billion pound money transfer company is shifting its primary listing to the US.

So these developments are flashing warning signs for British lawmakers, but also raising serious questions about London's ambitions as a tech capital.

Welcome to the City of London, The City of the City.

The City of London Bank.

We need mind the gap between the tram and the financial hearts of the country, the City, the City.

Welcome to in the City, stand care of the doors.

In this episode, we'll dig into what's behind the shift and why some of the UK's leading fintech firms are turning away from London while the city keeps pushing this image of itself as a booming tech capital.

Well to help us unpack it all.

I'm delighted to be joined by Amy Thompson, Bloomberg's tech team leader for ea AM.

I'm so happy you're here to make sense of all of this.

Hi, thanks for having me.

How's the UK doing.

We're in the middle of London Tech Week.

Last week for the first time we had south By Southwest who had pretty cool speakers.

It generated a little bit of a buzz.

But is it attracting money?

I mean, London as a tech hub in Europe is still the biggest.

It's still where you should be if you're startup or scale up in Europe.

So where the venture capital money is, where the private equity capital is so yes.

But as far as tech conferences go, there is the long standing rivalry between London Tech Week and Viva Tech, which kicks off on Thursday.

So I think it'll be interesting to compare the buzz between the two.

This year I moderated a couple things at south By Southwest and people are saying, where are you from?

Are you from London?

Is there a correlation between like conferences and attracting money or is it just because people like to come to London because London has a good infrastructure and again, it creates a buzz, but there's not necessarily capital being deployed on the back of that.

Oh that's tricky.

I mean, I think the London conferences will have the Like you said, the big London vidtechs more likely to show up.

But for what it's worth, Viva Tech seems to be the buzzier, the buzzier show.

I think they had Elon Musks show up last year.

Jensen Wang heereed at London Tech Week on Monday, but he's going to be at Viva Tech again on Thursday, and that's where Nvidia is also having it's its own meeting on the sidelines.

We've got a lot of Open Eye executives going to VivaTech, so that seems to be drawing more of the international crowd.

Is it a good bad thing that Elon Musk doesn't come to London.

He's been so vocally against UK regulations some of the things that the UK has been doing, also for hate messages online.

I mean he's a little bit obsessed with the UK.

Yeah, a lot of the online safety legislation that's come out in the UK has made x for example, pretty vulnerable.

But that said, he's no fan of European regulations either.

So I'd like to think we're equally in the doghouse when it comes to Elon Musk.

You mentioned the Nvidia CEO.

He's the person at the moment that everybody wants to speak to.

He was on stage with Cure Starmer on Monday and London Tech Week.

Were we expecting a bit of money being put to a lot of projects.

Yeah, we had all sorts of conspiracy theories ahead of Jensen's adherence.

Don't think that money was on skills up.

I think maybe we're hoping for an enormous data center or something like that.

But you know, his interest in the UK is nice, he called us.

I think gordilux circumstance between these two ideas that you're rich with great computer scientists.

It's a fantastic place for vcs to invest.

The ecosystem is really perfect for takeoff.

We've got the companies, we've got the people, we've got the universities, just don't have the compute.

And then Cure Starmer announced that the country would be spending an additional one billion pounds on Compute.

Our ambition that we are determined to be the best state partner for tech entrepreneurs anywhere in the world.

That's the bar, that's the ambition that I've set for my government, and so on that front, I can announce today also that we're committing an extra one billion pounds worth of funding to scale up our compute power by a factor of twenty.

Now, you know how important that.

I don't know if this is fair, but I couldn't help but think at the moment of the five hundred billion that the US was just talking about, or you know, the UAE saying that it was going to build a five gigawat data center, which could easily be in the tens of billions, and who knows if we'll ever see like those numbers realized.

But a billion pounds at a moment like this, I think that's a little deflated.

Is this government really committed to putting tech and AI as a priority?

I mean, it's hard to tell.

We were talking a little bit more about how the one billion AI pledge sounds so much like the one billion semiconductor pledge under the SUNet government, and how that felt very too little, too late, and this feels very much the same.

So it is it is a problem of a government that doesn't necessarily have a huge budget for this sort of thing, doesn't have a lot of giant companies that are coming to sort of pledge money to sort of placate a Trump figure, for example, doesn't really have that kind of pull trying to create an ecosystem around some of these companies.

I mean, what makes actually a great center for tech because you need the infrastructure, you need the power, you need the programmers.

At the moment, yeah, is also a lot of money being spent without knowing yet who comes top, right, So you can't really tell the winner.

Will you have a winner takes all in tech?

You know, is there a chance that they're based in London or does it not matter?

I mean, as far as the AI race is concerned, I don't think the companies really care where they're based.

They just want to go where they can get the compute.

They want to go where they can get the investors, and if that's the US, which it historically is, that's where they'll go.

Because it does feel like you're going to have a couple of giant tech companies that are going to dominate this race.

It'll be Meta and Zuckerberg's new brain trust, It'll be open Ai and Sam Altman.

It'll be a company that can get to a scale where everybody needs to use it and everybody needs to have it as part of its infrastructure.

And if that can happen in the US, that's where they're going to go.

I think the only people who really care where the headquarters are a politicians to journalists.

The companies themselves are just going to follow the resources most likely, And as far as London goes, I think a lot of people would agree with the Nvidia CEO that we do have amazing universities, an amazing talent, and really cool companies that start here.

But when they get to sort of the scale up phase, or they're thinking about a listing, or they're ready to get really really huge, a big tech company buys them, or they move their headquarters to the US.

They've listed here, they move their listing to the US just because that's where the investment.

Is the US.

Is it just because they have more liquid capital markets?

So is it a problem of the stock exchange and courses instead of a politicians problem?

Yeah, there's definitely some of that.

There was a really interesting story that I was reading in Blueberg about what happened to the IPO market and how that's affected Europe.

After COVID.

There's a huge downswing in IPOs all over the world, but particularly lately in Europe.

And one of the things we're arguing is that IPOs sort of get IPOs.

You have a lot of high profile listing thing that attracts investors, That attracts people who are knowledgeable about your industry, who are willing to take a bigger bet on it, higher valuations, etc.

Etc.

So if New York is getting all of the big tech listings, that's where all the investors are going to be paying attention.

That's where people are going to be willing to give you a higher evaluation for your company.

I mean, we've.

Spoken with chief executives that say, look, we like London, but actually, if you're publicly listed, you have a lot more scrutiny on a lot of things that even if you're transparent and you're doing fine, you may not want to put the spotlight on regulation, I imagine is a big concern if you're listed here.

Does Trump attract tech IPOs to the US.

I don't know if it's a Trump thing.

It's just historically the US has been where you go to list if you're a tech company, because that's for the investor base is I think there is definitely a conversation about whether some companies are going to bother listing at all these days, especially with the IPO market having been solo for so long.

There's a lot more private capital at work now, so it's possible opening is massive and they're not public, they haven't needed to go to the public markets, so I think that might be the other side of the argument.

I don't really think that the regulations have changed so much under Trump and under the new EU administration that it would sway anybody one way or the other.

If you don't want to go public, you're you know, either get bought by private equity, or you get bought by a big tech company, or you're flying solo in private.

Do you see a preference from chief executives or does it really depend on the space you operate in.

I think it depends on the space.

You've had.

Sort of mid sized companies tend to get folded into the bigger tech companies, like we've read about Qualcom buying one of our London listed tech companies, Alpha Wave.

They make semiconductor technology that's particularly useful for AI and data centers, which is really hot right now, and Qualcom's obviously been interested in it.

So you have sort of the big tech coming and swooping in and buying you out.

But also there are huge pools of capital.

You've got money coming out of DAE for example, Saudi funds that are just focused on AI and tech that are worth tens of billions, so you know there's money to be had and you can still keep control of your company and not necessarily do a financial report every quarter.

Who's London's biggest rival for the tech scene?

Definitely the US?

Or is there a European We talked a lot about viv Tech in Paris.

You were telling me also Germany has some really cool startups, but are they big enough or.

Yeah, I mean, as far as buzz I guess we're talking.

The US and China are on a different scale.

Who's on the same playing field as London?

I'd say probably France and Germany are doing some really cool things in tech right now.

We just put out a list of twenty five European startups with Founders Forum that went out earlier this week and saw people from all over Europe, but a lot of the concentration was UK, France and Germany.

What are you most excited about.

Is there a space in tech that you think has been overlooked that is crucial to getting it done.

Yeah.

I think one of the really interesting spaces for Europe right now is defense tech.

So if you look at a company like Helsing, they're never going to go to the US because part of their selling point is sovereignty and that's become so important now because of the way the geopolitics are changing in Europe.

They're attracting a lot of investment, a lot of interest.

Their drones are used in Ukraine.

I think they have agreements with the German government.

So companies that can help Europe meet its goals of becoming more independent, taking more control over their own defense I think will be really really interesting to watch this year.

Amy, thank you so much for joining us.

Thanks very much, thanks.

For listening to this episode of In the City from Bloomberg.

This episode was hosted by me Francin Laquin.

It was produced by Summersaudi Mosses and and Tala Maddi.

Brendan Francis Newnham is our executive producer.

Special thanks to Amy Thompson, Please subscribe, write and review wherever you listen to podcasts.