America is hijacking Britain's hopes of a tech revolution

Telegraph

5 hours ago

With its thatched cottages, 11th-century church and grade-II listed buildings, Harwell appears to be the quintessential Oxfordshire village.
A brisk stroll through the nearby fields, however, and you will soon find yourself in the beating heart of Britain's scientific community.
Harwell Campus, previously a Second World War airfield base for bomber squadrons and gliders, is home to 7,500 scientists and £3bn worth of technological infrastructure.
A vast spherical building housing the Diamond Light Source, a powerful particle accelerator, dominates much of the campus.
Yet the hub is also home to the UK's National Quantum Computing Centre.
This 40,000 sq ft facility, opened by science minister Lord Patrick Vallance last year, is designed to hold 12 cutting-edge quantum computers.
These machines, Lord Vallance said in October, would help 'solve some of the biggest challenges we face, whether it's delivering advances in healthcare, enhancing energy efficiency, tackling climate change, or inventing new materials'.
The centre is integral to Oxford's hope of succeeding in the global race to crack quantum computing, as it competes with tech giants from both the US and China.
These quantum machines should, the theory goes, be able to outperform classical computers many times over by relying on the principles of quantum mechanics.
However, it appears the rise of Oxford as a quantum hub has not gone unnoticed.
'Had to sell to America'
Last week, a 60-person start-up called Oxford Ionics was sold in a $1bn (£730m) deal to US rival IonQ, a $10bn US-listed quantum giant.
The takeover, made up almost entirely of the company's shares, landed Chris Ballance and Tom Hart, Oxford Ionics's founders, a paper fortune of $180m.
Driving the deal were breakthroughs in developing 'trapped ion' quantum semiconductors, as Oxford Ionics developed chips that were twice as powerful as their rivals and less prone to errors.
For a start-up founded in a basement in Oxford, the deal represented quite the outcome.
Niccolo de Masi, chief executive of IonQ and a Cambridge University graduate, claimed the deal would create a company 'head and shoulders' above its rivals.
He also stressed that Oxford would become IonQ's 'global R&D hub'.
However, the deal has renewed questions over whether Britain has the ability to scale cutting-edge start-ups to help them compete on the global stage.
'Oxford Ionics epitomises British innovation,' said Henry Lee, a strategist at the Tony Blair Institute for Global Change said last week. 'Brilliant Oxford research. Great early backing. Promising tech. But when it came time to scale? Had to sell to America.'
Founders in the nascent quantum sector have similarly mixed feelings about the deal.
Sebastian Weidt, the chief executive of Universal Quantum, says the sale was a 'testament to the amazing foundations we have in quantum computing in the UK'.
However, he adds it was also an 'example of a long list of companies failing to achieve escape velocity independently in the UK'.
Inflection point
Britain was an early mover in quantum technology.
In 2014, under David Cameron's coalition, the government earmarked £1bn in state funding for UK scientists and experts in quantum.
Rishi Sunak renewed this pledge in 2023 by promising £2.5bn over the coming decade.
This helped fund years of learning, as most quantum computers have so far only been useful for esoteric research and experiments, such as complicated maths problems with little practical use.
Yet some technology leaders now believe quantum computing technology is at an inflecion point.
This includes Jensen Huang, chief executive of $3.5 trillion tech giant Nvidia, who said last week said useful quantum computers were 'within reach'.
Inevitably, this has posed questions about whether Britain is ready to capitalise.
Late last year, Peter Kyle, Secretary of State for Science, announced £100m to fund five quantum hubs in the UK. Another £121m was set aside in April.
However, industry insiders fear this falls short of the amount industry had expected under the £2.5bn strategy set out by Sunak.
Ashley Montanaro, co-founder of Bristol start-up Phasecraft, says: 'Delivery of this funding has lagged behind – especially on the software side.
'It's no surprise that UK quantum companies are looking at opportunities beyond these shores.'
Oxford Ionics is not the only UK quantum business bought out by a larger US counterpart in recent years.
In 2021, Psiquantum, one of the most promising quantum companies founded by Bristol University professor Jeremy O'Brien, moved to Silicon Valley to secure funds. It is now in the process of raising funds at a $6bn valuation.
That same year, another start-up called Cambridge Quantum Computing agreed to merge with a unit of US giant Honeywell. Much of its team is now based in the US.
Race for quantum supremacy
Some investors say gaining access to later-stage funding remains a challenge for European businesses in cutting-edge 'deep tech' sectors like quantum.
Hermann Hauser, founding partner of Amadeus Partners and an investor in Oxford Ionics, says: 'Finding enough money for European scale-ups is our number one problem.'
Rob Jesudason, chief executive of Serendipity Capital, an investor in Quantinuum, says the UK 'still lacks' the 'deep tech-orientated capital to scale these organisations'.
Not everyone agrees, including Hussein Kanji, of investment firm Hoxton Ventures, who says that 'too many of us worry that we sell our best companies prematurely'.
Meanwhile, Steve Brierley, chief executive of quantum business Riverlane, insists that the Oxford Ionics deal is a 'sign that our quantum sector is maturing and attracting serious international attention'.
Rather than this being a problem, he says, 'that is something to be proud of and to build on'.
Ballance, of Oxford Ionics, adds that Britain has actually done well to retain such a large proportion of its quantum talent over the past decade.
Without the UK championing the technology, he says he would have taken his company to the US a decade ago.
Instead, he has built a $1bn business from its base in Oxford, which he says will continue to house its main research centre.
Similarly, IonQ's De Massi claims a UK-US tie-up is no bad thing, particularly as the West seeks to defeat China in the race for quantum supremacy.
'We are the best chance at beating China in the quantum space race,' says De Masi. 'This is critical to UK and US national economic security.
'We have to beat those other guys together.'