In an age when AI is catapulting company valuations to dizzying heights, billions are out of vogue. Today, business is all about trillions.
Nvidia, the US chipmaker, became the first company in history to reach a $4tn (£2.9tn) market value earlier this year. Microsoft is hovering just below that at $3.8tn (£2.8tn). On a good day, Alphabet sits at $3tn (£2.2tn) and Meta at $2tn (£1.48tn). Another could soon join the $1tn club: Oracle briefly approached the $1tn (£733bn) mark last week.
Anxious not to miss out, the UK’s new business secretary, Peter Kyle, has set out his vision for the UK to host its first £1tn ($1.36tn) company. “I want this to be the greatest place to start a business or scale up,” he told business leaders last month. The £1tn milestone has been reached by only a select group of global firms – almost exclusively US tech giants – and has so far eluded British businesses.
The entire FTSE 100 has a combined market capitalisation of around £2tn. That means Kyle is calling for a single company to account for half the value of the UK’s top 100 firms combined. It’s an ambitious goal. But what would it take to build a £1tn company in the UK – and what’s standing in the way? Four experts weigh in.
The US is often called the “land of opportunity” – and that’s reflected in the scale of its corporate giants. Today, multiple US companies, from Apple to Microsoft, have surpassed a $1tn market value. In contrast, the UK has struggled to build businesses of that magnitude. While we’ve produced globally recognised firms, such as AstraZeneca, HSBC and Shell, none are valued above £200bn.
A key reason for this is sector focus. Britain’s largest firms are concentrated in energy, banking and pharmaceuticals – capital-intensive industries with slower growth trajectories. In contrast, the world’s most valuable companies are in technology. The US dominates in this space, supported by a vast domestic market, deep supply chains and a mature tech ecosystem.
Culturally, the US embraces bold ambitions. Building the best and the biggest has been part of the national psyche ever since the first skyscraper was erected. Conversely, there is a pervasive scepticism among many UK boards and investors about whether British companies can reach such stratospheric valuations. That lack of belief is compounded by executive remuneration structures that fail to incentivise long-term, high-risk efforts. The UK has been persistently behind on salaries for some time.
UK boards are quick to cash in when US acquirers offer strong premiums over current valuations. While understandable from a shareholder value perspective, this dynamic prevents many promising UK firms from ever reaching their full potential, let alone the £1tn mark.
US investors have a higher tolerance for risk and invest aggressively in emerging technologies. This enables new firms to rapidly dominate their niches. As these US companies scale, they acquire the world’s best startups – often before they have a chance to become significant competitors. This strategy consolidates market power, making it even harder for UK firms to grow into global tech giants.
Building the UK’s first £1tn company will require more than just ambition. It will take best-in-class innovation, infrastructure, international growth and, in truth, luck.
Trillion-dollar companies, such as Apple and Microsoft, have dominated in their markets by innovating on a scale unlike their competitors. Specifically, they invest heavily in research and development (R&D). Apple spends close to $30bn (£22bn) a year on R&D. For a UK-based company to compete, the country must commit to fostering a better environment for companies to access both capital and talent quickly.
The main challenge facing UK companies is access to growth capital. In 2023, UK tech investment fell by 57% compared to 2022. In stark contrast, the US attracted close to $79bn (£59bn) in funding in that same period.
The UK must work to overcome this disparity and stop our brightest innovators from spending all their time and effort on funding rather than innovation. The government must provide more incentives and push regulatory frameworks that enable high-risk industries to thrive.
Achieving a £1tn valuation requires a global mindset from day one. Companies such as Revolut hit their unicorn status by expanding internationally. UK firms must therefore focus on untapped markets in Asia, Africa and Latin America – not just Europe.
The UK has a fantastic base to build £1tn companies. We’re home to three of the world’s top 10 research universities, a valuable asset with enormous untapped potential.
The first UK company to reach £1tn will likely emerge from our science and deep-tech ecosystems, and will be rooted in British intellectual property (IP) and ambition.
We already have the ingredients: unique research, world-class IP and the drive to build globally significant ventures. But reaching the £1tn mark hinges on two critical factors: attracting exceptional talent and building a capital ecosystem that can fund them to maturity.
More scale-up investment capital is essential to enable our best companies to invest in their cutting-edge science. We can secure this by attracting more foreign investment and encouraging investment from UK pension funds.
But capital alone isn’t enough. It must be matched by deep operational expertise – the kind of experience that knows how to build high-growth companies. Sadly, talent of this calibre is in short supply. We must therefore create an environment that attracts the world’s best entrepreneurs and, critically, a visa system that makes it easy for them to live here.
These factors are especially critical in emerging fields, such as quantum. This is a field with tremendous potential to create a £1tn company and where the UK already has a scientific lead. But we must act now to unlock this opportunity. We cannot afford to wait for 10 years. By then, the opportunity will have passed and the £1tn prize will have been won by others.
Building the UK’s first £1tn company is not just about having brilliant technology or ambitious entrepreneurs, but also creating regulations that enable high growth and public trust.
History shows us that regulation does not kill £1tn dreams. Actually, it can help them along. Banking could not have reached today’s maturity without deposit guarantees that gave people confidence to entrust their money to financial institutions. Aviation evolved a niche adventure sport into a huge industry because of safety standards that made millions feel comfortable with flying.
Today, AI is the biggest catalyst for growth to propel UK companies to £1tn valuations. But trust remains a critical barrier. The black-box approach of many AI systems creates hesitation among both enterprises and consumers. A thoughtful approach to regulation could instead help to build the transparency and explainability frameworks that unlock AI’s true potential.
When regulation establishes clear rules around data access, portability and AI explainability, it enables the secure sharing and analysis of data that AI needs to thrive. Instead of fearing opaque systems, organisations then gain the regulatory legitimacy to adopt AI responsibly and at scale. This creates a foundation where AI can become the tool that helps businesses reach new standards while making faster, better decisions with complete trust in their data.
AI can thrive under smart regulation. AI-powered insights combined with regulatory trust create unprecedented growth potential. If that happens, then it’s simply a matter of time before we reach that £1tn milestone.
In an age when AI is catapulting company valuations to dizzying heights, billions are out of vogue. Today, business is all about trillions.
Nvidia, the US chipmaker, became the first company in history to reach a $4tn (£2.9tn) market value earlier this year. Microsoft is hovering just below that at $3.8tn (£2.8tn). On a good day, Alphabet sits at $3tn (£2.2tn) and Meta at $2tn (£1.48tn). Another could soon join the $1tn club: Oracle briefly approached the $1tn (£733bn) mark last week.
Anxious not to miss out, the UK’s new business secretary, Peter Kyle, has set out his vision for the UK to host its first £1tn ($1.36tn) company. "I want this to be the greatest place to start a business or scale up,” he told business leaders last month. The £1tn milestone has been reached by only a select group of global firms – almost exclusively US tech giants – and has so far eluded British businesses.
