Draft proposals for the bill from 2018 suggest no particular geography will be singled out – that it would introduce more rigorous checks on any state-backed group looking to buy a more than 25pc stake in any British firm developing anything deemed key to national security.
For some, the broad nature of the bill is a concern. “We’re worried in case it prevents sovereign wealth funds from investing in UK companies,” says one tech industry source. Those funds play a significant role for start-ups, with research from ICEX suggesting around 9pc of global VC deals included sovereign wealth funds in 2018. “For better or worse, a load of the SoftBank Vision Fund money comes directly from the Saudis, for example.”
Such money has already been poured into the British tech ecosystem. The Saudi-backed SoftBank Vision Fund now owns around a 25pc stake in ARM, seen as another example of British leader bought by overseas investors.
SoftBank Investment Advisers, which manages the Vision Fund, says it remains “committed to supporting the UK tech ecosystem”, but that it also “recognises the need for countries to protect their legitimate national security interests”.
Sir Hossein Yassaie, a former chief executive of Imagination, says such entities should not be included in the tougher measures. “SoftBank are financial investors. This is where intent should be key. The intent of an acquirer is what? If it is purely financial, we shouldn’t worry about it at all. If there are other connotations – if their intent is untoward and they’re trying to move the tech out of the country – that’s when it becomes risky and dangerous, and that’s when we should be asking questions.”
How such questions will be asked under a new bill remains to be seen. There are some, including Sir Hossein, who advocate for a new panel to be set up, made up of technology experts and defence, social and medical specialists to advise over which deals need to be scrutinised further, what the intent of a buyer is and what counts as a national security risk.
Where once this may have only included defence tools, technologists now say that autonomous vehicles, electric battery technology and IP all could be seen as enabling technologies – and potentially risky if they were to fall into the wrong hands.