Brexit supporters vowed to make the UK a “tech superpower.” But as Brits prepare to vote on July 4, the ambition seems forgotten. Chip designer Graphcore symbolizes the missed opportunity.

The campaign focuses on immigration, taxes, health care, and even the incumbent Prime Minister’s role in the 2008 financial crisis. Tech receives almost no mention.

That’s unfortunate — and dangerous.

Consider the tragic tale of up-and-coming chip company Graphcore. While the US and European Union pour billions into developing their semiconductor capabilities, the UK semiconductor strategy overlooks this new potential national champion.

Graphcore was started in 2016 by Nigel Toon and Simon Knowles, serial entrepreneurs who had just sold the largest British semiconductor startup, Icera, to Nvidia, the high-flying AI chipmaker. Toon and Knowles are now attempting to disrupt Nvidia. The Nvidia GPU, originally designed to render graphics, fueled artificial intelligence. But Toon and Knowles think they have found a better AI solution. They call their invention the IPU, the “Intelligence Processing Unit.” Graphcore hoes it could break Nvidia’s dominance – or attract Nvidia to buy them and adopt the idea.

Both outcomes would benefit Britain. Venture capital investors have poured $767 million in Graphcore, much more than they have spent in any other startup. Previously Icera raised $262 million.

Despite this success, the government’s semiconductor strategy supports only NVIDIA-style GPUs, overlooking Graphcore’s innovation. Is this a deliberate attempt by the Conservative government to eschew intervention in favor of a potential national champion, so that “the market” can take its natural course? Or is it simply that UK government officials and politicians do not understand the difference between a GPU and an IPU, and do not have the competence to engage with the semiconductor industry to find out?

Such mistakes were avoided in the past. Back in the 1980s and 90s, both Conservative and Labour governments prioritized building up UK tech, particularly semiconductors. Labour helped give birth to Britain’s first semiconductor startup Inmos. Conservatives can claim indirectly to be behind the birth of ARM, the cutting-edge, world-class chip design firm.

Ever since, UK semiconductor policy has gone downhill. A Japanese investment vehicle SoftBank bought the former national champion ARM and turned it into a cash cow for its investments, including the failed WeWork. Brexit cut the British Semiconductor industry out of the €43-billion-worth European Chips Act.

While not part of their core election campaigns, both major parties acknowledge the need for government intervention in tech. The Conservatives promote a Science & Technology Framework, which provides £370 million in new tech funding, £250 million of which is to be invested into three technology areas where the government says the UK enjoys global leadership: AI, quantum, and engineering biology. A key part of the AI initiative is to build an exascale computer – the project that specifies GPUs, and hence excludes Graphcore

Opposition Labour, favored to sweep the elections, emphasizes planning and AI regulation. Its five-year plan urges pension reforms to unlock some of the £2 trillion in capital that could fund the next great British unicorn. It wants to copy France’s ‘Tibi’ scheme to build bridges between VCs and institutional investors, construct a public dashboard comparing universities’ spinout success, and create a new “Procurement Council of Experts” to help make the government itself a viable anchor customer for promising start-ups. 

While worthy projects, both parties are emphasizing the need to cut, rather than expand, public tech spending. Labour has abandoned its previous pledge to invest £28 billion in green technologies in favor of fiscal caution.

Brits bought a post-Brexit mirage. When they left the EU, Brexit leaders promised to promote a tech-friendly environment. Instead, they have toughened regulations. First came the Online Safety Bill that allows the UK government to demand that online platforms break encryption and search through photos, files, and messages to find illegal content, imposing stiff fines for companies that don’t comply. Second came an update to the Investigatory Powers Act, which would compel companies to inform the UK Home Office about changes to security features before they are released. And latest comes a new Competition and Consumers Bill that attempts to crack down harder on US Big Tech than the EU’s Digital Markets Act.

Instead of restrictive regulation, the UK needs a positive policy initiative to promote its engineering and scientific strengths. As the electoral campaign moves to a climax, Graphcore is running out of its initial funding and rumors are circulating that it has been put up for sale. A potential buyer is Softbank.

A Graphcore sale looks like the equivalent of the US government leaving Intel out of the US CHIPS & SCIENCE Act because it does not understand the difference between a GPU and a CPU, which Intel invented. Ideological dogma or technological illiteracy? Either way it does not bode well for “UK Semiconductors Inc.” — unless July 4th really brings about real change.

Christopher Cytera is a Non-resident senior fellow with the Digital Innovation Initiative at the Center for European Policy Analysis and a technology business executive with more than 30 years of experience in semiconductors, electronics, communications, video, and imaging.

Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.