Graphcore sold and Biden rattled
Plus, Rachel Reeves to form new council of economic advisers, UK business distress fastest rising in Europe and Rio Tinto is wargaming a massive takeover
Softbank Group CEO Masayoshi Son speaks during the annual general shareholders' meeting in Tokyo (Image: Yuichi Yamazaki/AFP)
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Happy Euros final eve eve. Before all eyes turn to Berlin this weekend, big news out of Bristol this morning as another promising British AI company has been snapped up.
Graphcore, which was once dubbed “Britain’s Nvidia”, is on the verge of being sold to the Japanese investment giant SoftBank after the government green-lit the deal. Having been valued at £2bn in a 2020 financing round, the value of the deal for the chipmaker is reported to be closer to $500m (£386.9m).
The company has been looking for further investment after cutting its headcount by a fifth and shutting operations in Norway, Japan and South Korea. Graphcore’s co-founders Nigel Toon and Simon Knowles are expected to remain as chief exec and CTO. While its HQ is said to be staying in Bristol, the UK’s ability to nurture fast-growing tech companies has been thrust into the spotlight again.
Peter Kyle, the secretary of state for science, innovation and technology, has admitted that the deal is a “reminder of the important work that needs to be done” to make the UK “the best place to start and grow a business.”
SoftBank controversially bought Arm for £24.3bn in the same year Graphcore was founded. The Cambridge-based chip designer was listed on the New York Stock Exchange in September last year and contributed significantly to Softbank’s £1.18bn profits for the first quarter of 2024.
Our editor-in-chief Graham Ruddick wrote the following on the day Arm floated:
There has been much soul searching in the City about Softbank choosing to list Arm in New York rather than London. But the demand to buy shares in Arm is a reminder of the positive side of this story – a world-class technology company was built in the UK.
Across the pond, president Biden’s re-election chances have been dealt another blow after a pair of gaffes last night. He took to the stage at the Nato summit in Washington to introduce the Ukrainian president but called Volodymyr Zelensky “president Putin”.
An hour later, Biden was shaking off questions from the press about his mental fitness and the ability of vice-president Kamala Harris to take the top job. Instead of referring to Harris, the president said: “I wouldn’t have picked vice-president Trump to be vice-president did I think she wasn’t qualified to be president.”
This comes just a fortnight after his mistake-laden debate performance against Donald Trump. Polling numbers on 27 June, the day of the debate, showed that Trump and Biden were neck and neck in the polls. The former now has a 2.3-point lead in the polls and is a 3-1 favourite to win the race to the White House.
Despite Biden being bullish about his ability to run in November’s presidential race, actor and significant Democratic party donor George Clooney spoke out on Wednesday asking for him to step aside. At least 16 of the 213 Democrats in the House and one of the Senate’s 51 Democrats have appealed publicly to the president to withdraw from the race.
We’ll see if time will be kind to Biden’s persistence.
Business Question
Outside London, which UK city has the highest number of tech start-ups?
A. Manchester
B. Birmingham
C. Edinburgh
D. Bristol
The answer can be found at the bottom of the page.
Business in Brief
Everything you need to know
1. Rachel Reeves is planning to create a new council of economic advisers to help guide Labour’s number one “national mission” of growing the economy. The chancellor has lined up the appointment of a leading academic from the London School of Economics (LSE) to chair the council, which will help to inform the government’s growth policies. The Guardian has the exclusive here.
2. The UK saw Europe’s steepest jump in the proportion of companies in financial distress last year as the country went through a period of sluggish economic growth. Some 9.9 per cent of UK companies were in distress last year, up from 8.4 per cent in 2022, according to a survey from consulting firm Alvarez & Marsal. You can read more here.
3. Sterling rose to its highest level against the dollar in almost a year yesterday. The pound rose as high as $1.2947, the highest level since late July 2023, and was later trading up 0.5 per cent at $1.2907 after data showed the UK economy grew 0.4 per cent. You can read more here.
4. Complaints about the banking sector have reached the highest level in at least a decade, according to the Financial Ombudsman Service. Consumers raised 80,137 cases with the free resolution service about banking and payment products in the financial year 2023-24, compared with 61,995 in 2022-23. You can read more here.
5. The FTSE 100 mining giant Rio Tinto is wargaming its biggest takeover swoop for years after the collapse of rival BHP’s £39bn (£24.7bn) bid for Anglo American. Sky News has learnt that Rio is studying a refreshed list of potentially industry-reshaping takeover targets including Teck Resources, the Canadian group. You can read more about the story here and more about wargaming here.
Business Quotes
Inspiration from leaders
“In most cases, being a good boss means hiring talented people and then getting out of their way.”
– Tina Fey
Business Thinker
Ideas on the future of business and leadership
1. ? This AI chatbot will answer all your climate change questions ?
2. ?️ Three ideas for unlocking the UK’s economic potential ?️
3. ? Escaping the tyranny of email is an art worth cultivating ?
And finally…
The nation will unite on Sunday to get behind the Three Lions as they bid to bring it home against the Spanish. For those who can’t make it to Berlin to watch it live, The Independent has done a great summary of the best pubs, bars and outdoor places to watch the Euro 2024 final.
You can read the article here.
The answer to today’s Business Question is Edinburgh.
