People are once again likely to question when the UK will start building its own billion-dollar tech companies as yet another promising tech firm is poached by a Silicon Valley giant.
Google confirmed last night that it has bought London-based artificial intelligence start-up DeepMind in a deal thought to be worth $400 million (£232 million). If the reported figure turns out to be true then it will be Google’s largest European acquisition to date.
DeepMind was founded by 37-year-old neuroscientist and former teenage chess prodigy Demis Hassabis, along with Shane Legg and Mustafa Suleyman. The artificial intelligence company specialises in algorithms and machine learning for e-commerce and games.
While those behind DeepMind will cash in on the deal and see it as a positive move, there are concerns that some of the best tech companies are failing to reach their full potential by selling out too quickly.
Saul Klein, investor at venture capital firm Index, tweeted that he thought the deal was “amazing” but added that next time he wants to see a $40 billion business built.
When a company sells up, the surrounding community may be concerned that talent, IP and other assets will be relocated, leaving things worse than they were before. Indeed, all of DeepMind’s 50 AI experts will be transferred over to Google as part of the deal.
Robbie Hughes, CEO of clinical management software company, Qinec, previously told Techworld that British people need to change their attitude if the country wants to contend with the US.
“We start businesses to solve a problem while Americans create a company to change the world,” he said.“We simply don't think big enough. Perhaps if British companies aimed higher then we would stop underselling ourselves and in the future it would be UK companies taking over US ones.”
However, it can put money into the pockets of entrepreneurs who can then go on to become business angels and help feed the local ecosystem or set up more businesses themselves.
There are pockets of the UK where billion-dollar tech companies exist, such as Cambridge, where there are 12 companies with turnovers over 12 billion sollars. Billion-dollar IPOs that have occurred in Cambridge include CSR and ARM, but neither of them are on the scale of Google, Facebook or Twitter.