Former Google chief executive Eric Schmidt has urged UK startup founders to follow the example of their peers in Silicon Valley and avoid exiting their companies early.
Mr Schmidt told a tech gathering that Europe’s tech firms were hampered by too little investment and too much red tape.
Speaking at the Sifted Summit on Wednesday, he noted an accelerating trend for promising AI startups to be bought up by big American companies. US chipmaker AMD bought Finland’s Silo AI for $665m, while Salesforce acquired London-based Convergence for an estimated $200m.
“I’ve spent a fair amount of time with UK entrepreneurs,” he said. “They tend to make $100m and then sell. In Silicon Valley, people say ‘I started there’,” he told the audience. “Please don’t sell for $100m. Aim for $100bn.”
Bubble warning
Mr Schmidt’s comments came amid soaring valuations of American technology companies, prompting concerns among market officials of an artificial intelligence (AI) bubble that could burst and cause a global market sell-off that would hit the UK.
The Bank of England’s financial policy committee has warned that stock market valuations, particularly in the US, “appeared stretched” and on some measures in the US are “comparable to the peak of the dotcom bubble”.
Soaring valuations in the tech sector were one of a number of risks highlighted by the committee. It warned that “the risk of a sharp market correction had increased”.
Excitement about AI’s potential has grown significantly ever since the American group OpenAI released its ChatGPT bot in late 2022.
As some of the big players such as Microsoft and Facebook owner Meta unveil multi-billion dollar spending plans for AI, even some of technology’s leading proponents have signalled that the industry is in bubble territory.
Sam Altman, the boss of OpenAI, said recently that investors were “over-excited” about AI.
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