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2025 is going back to the future
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From Acorn to AI: the founder of Arm Holdings talks about his part in the UK’s start-up community, and the three criteria he looks for when making an investment
Hermann Hauser, now 75 years of age, is one of the most influential technology entrepreneurs in the world. From his early days co-founding Acorn Computers with his friend, Chris Curry, he became an integral figure in the so-called ‘Cambridge phenomenon’, and went on to form Arm Holdings, whose CPUs can now be found in 99% of the world’s smartphones.
“It’s difficult to go back that far; for people to imagine that there were no microprocessors. No PCs. No smartphones. But that was a wonderful time. We were envisaging how these microprocessors might change our lives one day,” Hauser tells us.
Today, the Austrian Hauser refers to himself as a “sort of serial entrepreneur turned venture capitalist.” But it was a passion for physics that initially brought him to Cambridge in 1975 – a city he had already fallen in love with while studying there as a 16-year-old language student.
“I’m a physicist, and when I was doing my PhD at the Cavendish Laboratory in 1975, there was a local microprocessor group in Cambridge that shared exactly the same excitement that young people now have about AI,” Hauser enthuses.
This was the first time Hauser was introduced to a computer. And it was a period that inspired him to launch two of the UK’s most significant technology companies: Acorn Computers (in 1978) and Arm Holdings (in 1990). Following this success, and his role in building the Cambridge technology community that became known as Silicon Fen, Hauser’s advice and capital was in high demand.
“People first came to me because of the success that we had with Acorn Computers and Arm, which is now our most valuable technology company, and has just overtaken Intel in market cap. So we’re now a more valuable company than Intel,” Hauser tells us.
Dropping Intel into the conversation is no accident. After all, it was Intel that turned its back on Hauser in 1985, when he sought permission to modify one of its chips. Intel refused the request, but this setback led Hauser to develop Arm’s own processor, which in turn established him as a key figure in the UK’s burgeoning start-ups sector.
“Many people approached me about business angel investments,” Hauser says. “For a while, it was around 50% of the business angel investment in Cambridge. And then I just couldn’t cope with the deal flow anymore. So we started Amadeus Capital, because I needed more money and a more professional way of doing things.”
Amadeus Capital now boasts 25 years of investment experience, and is currently active in three main areas: AI; quantum computing; and synthetic biology. But it’s AI that tops the list, at a total of 20 investments thus far, with Hauser telling us that “AI is the most transformative technology we’ve ever invented.”
“It is absolutely remarkable, because Amara’s Law doesn’t hold for AI,” says Hauser. (Amara’s Law states that “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.”) “People used to overestimate the short-term benefits of the new technology, and underestimate the long-term benefits. But AI really delivers these immediate productivity increases that we see in marketing and sales, so it has this instant, beneficial effect for the commercial exploitation of AI.”
Hauser has three criteria that he applies to any company that he’s considering investing in.
Hauser believes that his investments in the world of quantum computing are good illustrations of the three criteria, with two companies – PsiQuantum and Photonic – being particularly noteworthy.“There is no doubt about the size of the market. And then we’ve got the quality of the teams. Take Jeremy O’Brien and Stephanie Simmons at PsiQuantum and Photonic,” Hauser explains. “They are both total superstars. And on the third criteria, technology, you know, I do actually believe that photonic and electron spins might well be the long-term winners.”
As well as investing in multiple start-ups, Hauser has also been instrumental in defining the UK government’s strategy for technology and innovation within the worlds of business, academia, and the public sector. And in 2010, Hauser produced an official report, under the leadership of Innovate UK, in which he called for the introduction of a network of technology and innovation centres.
“I wrote the first report for the government on Catapult centres, and now Britain has nine of them, and has invested a couple of billion dollars in it,” Hauser says. “And I think that’s a very valuable intermediate solution to help get technologies out of universities, and into industry. So we need more of that. And we also need university technology transfer offices (TTOs) being more active in creating start-ups.”
Since his report in 2010, Catapult centres have formed the backbone of the UK’s technology and innovation strategy, with the Catapult Network now comprising nine innovation zones, including Bristol’s National Composites Centre, “where new technologies are further developed, scaled-up and realised.” But Hauser believes that there is still much more that could be done, and believes that pension funds bear much of the responsibility.
It’s also worth noting that Arm has established research relationships with UK universities, including Bristol, Cambridge, Edinburgh, Southampton and Barcelona. These centres of research excellence support ideas and innovation but more can always be done.
“The best thing we could do to help start-ups get out of universities is rejoin the EU, or at least rejoin the customs union,” Hauser says. (Hauser has previously claimed that Brexit was “the biggest loss of sovereignty” since 1066.) “But assuming that isn’t going to happen, the next thing we need to look at is pension funds. We need pension funds to reinvest in British industry, which they have abandoned.”
At the age of 75, and with an investment portfolio that features 68 companies, Hermann Hauser has the air of someone who’s generally excited about the future, and the changes new technology will bring. And whichever technologies win out, across the worlds of AI, quantum computing, and synthetic biology, history tells us that there’s a very good chance he’ll be involved.
Dan Oliver is a UK-based technology and design journalist with 25 years of experience. Dan has produced content for numerous brands and publications including The Sunday Times, TechRadar, Wallpaper* magazine, Amazon, Microsoft, Meta, and more.
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