UK pulls plug on top tech incubator after setting out to become ‘world’s next Silicon Valley’

Published

2 years ago

January 31, 2023

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Traffic passes around the Old Street roundabout, also referred to as “Silicon Roundabout,” in the area known as “Tech City” in London, U.K.

Chris Ratcliffe | Bloomberg | Getty Images

Tech Nation, the U.K. startup accelerator program, is set to close its doors after failing to renew its funding from the government, the organization said Tuesday.

The tech industry body said in a statement that it will be “ceasing all existing operations through a carefully planned wind-down and has commenced a redundancy consultation process.”

The group is “actively seeking interested parties to acquire its portfolio of assets to take forward in a new guise,” it added.

Created in 2010 under the premiership of ex-Prime Minister David Cameron, Tech Nation was a hallmark of the U.K.’s bid to create billion-dollar tech companies of global significance and rival the likes of Silicon Valley.

It claims to have helped produce household names in the U.K.’s tech scene, with a diverse range of alumni on its projects hailing from the likes of Monzo, Revolut, Deliveroo, Just Eat, Darktrace and Ocado.

According to Tech Nation, more than a third of all tech unicorns and decacorns created in the U.K. graduated from a Tech Nation program. Tech Nation graduates have also raised more than £28 billion ($35.4 billion) in funding to date.

While 80% of startups fail in their first two to five years, over 95% of startups on Tech Nation’s accelerator programs have gone on to scale, the group said.

Earlier this month, the Department for Digital, Culture, Media and Sport awarded its £12.09 million Digital Growth Grant to Barclays Bank. The lender’s Eagle Labs incubator, which operates independently of Barclays, is set to replace Tech Nation as the recipient of the grant.

The government put the contract out to tender last year after raising concerns that Tech Nation was in breach of state aid rules after failing to become “self-sufficient,” The Sunday Times reported.

Tech Nation says the DCMS grant accounted for roughly 62% of its funding in 2021/22. The remainder of its income came from sponsorship, commercial partnerships and other government contracts.

As a result of the move, Tech Nation said its current activities were “not viable on a standalone basis” and would therefore need to be wound up.

For employees whose primary role is government delivery work, Tech Nation has begun discussions with Barclays Bank about transferring those workers over to the lender.

The Home Office has also been notified of the move and its visa program for foreign tech workers “will continue in the immediate term,” Tech Nation said.

The next Silicon Valley?

The move has raised questions over the U.K.’s ambitions to rev up its digital leadership on the global stage following its exit from the European Union. Just days ago, Finance Minister Jeremy Hunt had talked up the U.K.’s chances of becoming the “world’s next Silicon Valley.”

“As an entrepreneur and digital champion, I’ve witnessed first-hand the impact that Tech Nation has had in creating one of the most exciting and dynamic parts of our economy,” Martha Lane Fox, founder of lastminute.com and currently president of the British Chambers of Commerce, said in a statement Tuesday.

“The skills they’ve equipped entrepreneurs with and opportunities they’ve created have been second to none. They will be missed.”

It also adds to the woes of the U.K.’s tech sector, which is currently reeling from a global slump in venture capital funding amid fears of an oncoming recession.

On Tuesday, the International Monetary Fund said the U.K. was the only nation among all advanced economies on track to contract in 2023. Even sanctions-hit Russia is forecast to grow.

“The UK tech ecosystem has today lost an important member of its community,” said Russ Shaw, founder of Tech London Advocates, the U.K. tech network.

Total VC funding to startups in the U.K. totalled $29.9 billion in 2022, down 27% from $41 billion a year earlier. Global startup investment sank to $233.3 billion, down 33% from $359.6 billion in 2021.

Technology

Tesla launches refreshed Model Y in China to fend off domestic rivals

Published

6 hours ago

January 10, 2025

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Tesla launched a revamped version of its Model Y in China.

Tesla

Tesla on Friday announced a revamped version of its popular Model Y in China, as the U.S. electric car giant looks to fend off challenges from domestic rivals.

The Model Y will start at 263,500 Chinese yuan ($35,935), with deliveries set to begin in March. That is 5.4% more expensive than the starting price of the previous Model Y.

A spokesperson for Tesla China said that the new Model Y is only open for pre-sale in the Chinese market, rather than being launched globally.

Tesla’s Model Y refresh comes after the auto giant this month reported its first ever annual decline in overall deliveries for 2024.

Elon Musk’s electric vehicle firm is facing heightened competition around the world, from startups and traditional carmakers in Europe. In China, the company continues to face an onslaught of rivals from BYD to newer players like Xpeng and Nio.

Jason Low, principal analyst at Canalys, notes that the Tesla Model Y was the best-selling EV in China in 2024 and that the popularity of the car “remains high.” However, he noted that the competition in the sports utility vehicle (SUV) segment with vehicles priced between 250,000 yuan and 350,000 yuan “has been fierce.”

“Tesla must showcase compelling smart features, particularly a unique but well localized cockpit and services ecosystem,” as well as “effective” semi-autonomous driver assistance features “to ensure its competitiveness in the market,” Low added.

Tesla is offering a number of incentives for customers to buy the Model Y including a five-year 0% interest financing plan.

The new Model Y can accelerate from 0 kilometers per hour to 100 kilometers per hour in 4.3 seconds, Tesla said, exceeding the speed capabilities of the previous vehicle. The Model Y Long Range has a further driving range on a single charge versus its predecessor.

Tesla has not introduced a new model since it began delivering the Cybertruck in late 2023, which starts at nearly $80,000.

Investors have been yearning for a new mass-market model to reinvigorate sales. Tesla has previously hinted that that a new affordable model could be launched in the first half of 2025.

Despite Tesla’s headwinds, the company’s stock is up nearly 70% over the last 12 months, partly due to CEO Musk’s close relationship with U.S. President-elect Donald Trump.

Technology

World’s biggest chipmaker TSMC posts record 2024 revenue as AI boost continues

Published

10 hours ago

January 10, 2025

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World's biggest chipmaker TSMC posts record 2024 revenue as AI boost continues

The logo for Taiwan Semiconductor Manufacturing Company is displayed on a screen on the floor of the New York Stock Exchange on Sept. 26, 2023.

Brendan Mcdermid | Reuters

Taiwan Semiconductor Manufacturing Co. posted December quarter revenue that topped analyst estimates, as the company continues to get a boost from the AI boom.

The world’s largest chip manufacturer reported fourth-quarter revenue of 868.5 billion New Taiwan dollars ($26.3 billion), according to CNBC calculations, up 38.8% year-on-year.

That beat Refinitiv consensus estimates of 850.1 billion New Taiwan dollars.

For 2024, TSMC’s revenue totaled 2.9 trillion New Taiwan Dollars, its highest annual sales since going public in 1994.

TSMC manufacturers semiconductors for some of the world’s biggest companies, including Apple and Nvidia.

TSMC is seen as the most advanced chipmaker in the world, given its ability to manufacture leading-edge semiconductors. The company has been helped along by the strong demand for AI chips, particularly from Nvidia, as well as ever-improving smartphone semiconductors.

“TSMC has benefited significantly from the strong demand for AI,” Brady Wang, associate director at Counterpoint Research told CNBC.

Wang said “capacity utilization” for TSMC’s 3 nanometer and 5 nanometer processes — the most advanced chips — “has consistently exceeded 100%.”

AI graphics processing units (GPUs), such as those designed by Nvidia, and other artificial intelligence chips are driving this demand, Wang said.

Taiwan-listed shares of TSMC have risen 88% over the last 12 months.

TSMC’s latest sales figures may also give hope to investors that the the demand for artificial intelligence chips and services may continue into 2025.

Foxconn, which assembles Apple’s iPhones, reported its highest-ever fourth quarter revenue this week, as it notched strong demand for AI servers.

Meanwhile, Microsoft this month said that it plans to spend $80 billion in its fiscal year to June on the construction of data centers that can handle artificial intelligence workloads.

CNBC’s Jordan Novet contributed to this report.

Technology

Supreme Court set to hear oral arguments on challenge to TikTok ban

Published

17 hours ago

January 10, 2025

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Supreme Court set to hear oral arguments on challenge to TikTok ban

Tik Tok creators gather before a press conference to voice their opposition to the “Protecting Americans from Foreign Adversary Controlled Applications Act,” pending crackdown legislation on TikTok in the House of Representatives, on Capitol Hill in Washington, U.S., March 12, 2024.

Craig Hudson | Reuters

The Supreme Court on Friday will hear oral arguments in the case involving the future of TikTok in the U.S., which could ban the popular app as soon as next week.

The justices will consider whether the Protecting Americans from Foreign Adversary Controlled Applications Act, the law that targets TikTok’s ban and imposes harsh civil penalties for app “entities” that continue to carry the service after Jan.19, violates the U.S. Constitution’s free speech protections.

It’s unclear when the court will hand down a decision, and if China’s ByteDance continues to refuse to divest TikTok to an American company, it faces a complete ban nationwide.

What will change about the user experience?

The roughly 115 million U.S. TikTok monthly active users could face a range of scenarios depending on when the Supreme Court hands down a decision.

If no word comes before the law takes effect on Jan. 19 and the ban goes through, it’s possible that users would still be able to post or engage with the app if they already have it downloaded. However, those users would likely be unable to update or redownload the app after that date, multiple legal experts said.

Thousands of short-form video creators who generate income from TikTok through ad revenue, paid partnerships, merchandise and more will likely need to transition their businesses to other platforms, like YouTube or Instagram.

“Shutting down TikTok, even for a single day, would be a big deal, not just for people who create content on TikTok, but everyone who shares or views content,” said George Wang, a staff attorney at the Knight First Amendment Institute who helped write the institute’s amicus briefs on the case.

“It sets a really dangerous precedent for how we regulate speech online,” Wang said.

Who supports and opposes the ban?

Dozens of high-profile amicus briefs from organizations, members of Congress and President-elect Donald Trump were filed supporting both the government and ByteDance.

The government, led by Attorney General Merrick Garland, alleges that until ByteDance divests TikTok, the app remains a “powerful tool for espionage” and a “potent weapon for covert influence operations.”

Trump’s brief did not voice support for either side, but it did ask the court to oppose banning the platform and allow him to find a political resolution that allows the service to continue while addressing national security concerns.

The short-form video app played a notable role in both Trump and Democratic nominee Kamala Harris’ presidential campaigns in 2024, and it’s one of the most common news sources for younger voters.

In a September Truth Social post, Trump wrote in all caps Americans who want to save TikTok should vote for him. The post was quoted in his amicus brief.

What comes next?

It’s unclear when the Supreme Court will issue its ruling, but the case’s expedited hearing has some predicting that the court could issue a quick ruling.

The case will have “enormous implications” since TikTok’s user base in the U.S. is so large, said Erwin Chemerinsky, dean of Berkeley Law.

“It’s unprecedented for the government to prohibit platforms for speech, especially one so many people use,” Chemerinsky said. “Ultimately, this is a tension between free speech issues on the one hand and claims of national security on the other.”