Following the government’s flagship AI Action Plan earlier this month, Chancellor Rachel Reeves has laid out a string of wider government measures designed to grow the economy, which includes a vow to build Europe’s “Silicon Valley” in the Oxbridge region.
Speaking at Siemens Healthineers in Oxfordshire, Reeves described the area between Oxford and Cambridge (also known as the Ox Cam arc) as “a hub for globally renowned science and technology firms” adding it “has the potential to be Europe’s Silicon Valley”.
Politicians have long used the Californian region, which is home to many of the world’s most successful tech startups, as a metaphor for a thriving, new business hub for British founders. But is it a realistic ambition? Or is the UK government just ‘Silicon-struck’?
Plans to fuel Ox Cam arc
Together with London, Oxford and Cambridge make up the so-called “Golden Triangle”, an area comprising five leading UK universities that have collectively produced world-leading research into new technologies, such as semiconductor research and AI development.
Golden Triangle institutions often attract greater funding, and both the University of Oxford and Cambridge University have produced a high number of successful spinouts.
That includes Mach42 and Quantum Dice, two technology companies that made our list of the top 100 startups for 2025 earlier this month.
Praising the “huge potential” that both cities offer UK startup talent, Reeves has unveiled a raft of policies to boost the region’s growth and add £78bn to the economy in the next 10 years. These include:
- Improving train links between Oxford and Cambridge
- Creating a new Growth Commission for Oxford
- Prioritising a new Cambridge Cancer Research Hospital
Two weeks ago, the prime minister unveiled his AI Action Plan, a roadmap for harnessing AI to accelerate growth, which included the creation of a large data centre in Culham, Oxford. Reeves today confirmed the plans for this new AI growth zone in her speech.
Presumably, the Ox Cam plan will be paid for from the AI Action Plan funding pool, although some experts have said the £14bn allocated to the government’s blueprint is not enough.
Is our obsession with Silicon Valley healthy?
Politicians have been drawing comparisons with Silicon Valley and the UK’s startup network for years, in order to position Britain as a leading destination for tech investment.
Perhaps the closest Whitehall came to realising that vision was the construction of the so-called ‘Silicon Roundabout’, a new traffic junction in Old Street, East London.
Near to a sought-after location for new businesses, the plan was to revamp the area to better support “innovative, high-tech” ventures. But delays meant it was only finished last June; 13 years after it was first commissioned, and five years later than planned.
Silicon Roundabout could be a cautionary tale for the Chancellor’s latest ambitions. By focusing on far away strategies, the government arguably risks ignoring immediate threats to the UK startup survival rate, such as recent tax rises announced in the Autumn Budget.
That’s what Aman Parmar, Head of Marketing at Bizspace, a coworking provider for startups, warns. Responding to Reeves’ speech, Parmar says “very little – if any – attention was placed on the immediate impact to those already struggling to keep their businesses afloat”.
Agreeing with this sentiment is Ivan Nikhoo, Managing Partner at Navigate Ventures. Nikhoo stresses that without access to capital, the UK’s Californian dream can’t be realised.
“Silicon Valley’s dominance is driven by an unparalleled concentration of capital, talent, and infrastructure,” he tells Startups. “It has five times more VC funds and raises seven times more capital than London.”
Reeves, “chasing an unrepeatable model”
Arguably, the Chancellor picked a poor week to herald Silicon Valley. Over the weekend, the tech world was thrown into chaos when China released DeepSeek, a new AI chatbot that it claims to have developed for a fraction of the cost spent by US developers on similar tools.
The episode is a reminder that there is no such thing as replicating innovation in the startup world. If the UK is to build a tech ecosystem to rival Silicon Valley, Nikhoo argues it must respond to the unique needs of its existing founder community; not overseas enterprises.
“Instead of chasing an unrepeatable model, the UK should focus on building the best possible version of its own ecosystem”, concludes Nikhoo, “one that attracts high-quality investors, supports startups at every stage, and removes friction for scaling businesses.”
