How do we make the London Stock Exchange great again?

Our most innovative companies are leaving the capital in droves. In this instalment of our London Unleashed campaign, top financier Ken Wotton looks at how we can halt the stampede

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When it comes to the next technological revolution that will shape all our lives, the Prime Minister's ambition for the UK is straightforward: we need to be an “Al maker, not an AI taker”.

Yet, this noble sentiment overlooks a real challenge that threatens to fatally undermine his vision. At the very moment Sir Keir Starmer was posing with industry leaders, including Nvidia's Jensen Huang, at London Tech Week this month, several of the UK's most promising tech companies were announcing they were selling up to American buyers.

The unfortunate timing highlights a very British weakness. The UK does not have a problem “making” innovation. The problem is what happens after that. After all, the very term “artificial intelligence” was coined in Britain. Visionaries, such as Alan Turing, were working on the foundations of the field as long ago as the 1950s, and the global race to develop artificial intelligence arguably began with DeepMind, a London-based start-up founded in 2010.

However, DeepMind's fate was all too familiar: it was acquired by Google for £400 million, a tiny fraction of the trillion-dollar valuations now commanded by the US tech giants it helped inspire.

If the Prime Minister takes one message from London Tech Week, it should be this: in a global economy increasingly driven by innovation and entrepreneurship, the UK cannot afford to neglect one of its most effective tools for scaling high-potential businesses — the equity capital markets of the City. Right now, UK innovation is at a crossroads. Venture capital funding has dropped 60 per cent from its 2022 peak and the IPO market has stalled.

At the same time the capital’s stock market is haemorrhaging its lifeblood of listings. In the first half of this year alone, 30 London-listed firms have agreed to takeover bids, the vast majority from overseas buyers.