Arm Co-founder: AI Will Create More Value Than Any Tech Wave Before It, But Expect a Bumpy Ride

Key points

• Hermann Hauser, co-founder of Arm (the company whose chip designs power most of the world's smartphones), says AI will create more economic value than any previous technology wave.
• Hauser warned in an interview this month that some AI company valuations have "clearly gotten ahead of themselves."
• He flagged in-memory computing and photonic computing as emerging approaches that could reshape how AI chips are built.
• Hauser argued Europe risks becoming a "technology colony of the U.S." if it does not build more of its own critical AI and chip infrastructure.

Hermann Hauser has seen every major technology shift since the late 1970s. He co-founded Acorn Computers in 1978 and helped create Arm, the British company whose chip designs now sit inside almost every smartphone and tablet sold anywhere on earth. Today he backs European deep-tech startups through his firm Amadeus Capital.

So when Hauser calls AI the biggest value-creating technology in history, it is worth listening. And when he adds a warning, that is worth listening to too.

What exactly is Hauser saying about AI?

His view is bullish but blunt. "This is a revolution that will create more value than probably any other technology revolution that we've ever seen," Hauser told CNBC Tech this month. In the same breath, he called it a "rollercoaster."

Some valuations, he said, have "clearly gotten ahead of themselves." He also flagged what he called circular financing deals, arrangements where companies effectively invest in each other to inflate their apparent worth, as a specific risk. That is the bubble part of his argument.

The survivor part sits alongside it. Hauser believes the biggest players, companies like OpenAI and Anthropic, carry enough capital reserves to ride out a reset in market expectations even if smaller players do not.

What does this mean for the chips that run AI?

Running AI is expensive, and the hardware that does it is hitting real limits. Chips are hard to cool. Memory is costly. Data moving back and forth between a processor and its memory burns enormous amounts of energy.

Hauser pointed to two approaches that researchers hope will ease those bottlenecks. In-memory computing keeps calculations inside the memory itself rather than shuttling data to a separate processor. Photonic computing uses pulses of light instead of electrical signals to move information, which can be far faster and cheaper to run.

Neither is in your laptop today. Both are active research areas. Hauser argued the shift could be as significant as the architectural ideas that let Arm challenge much larger chipmakers decades ago.

Can Europe compete, and should you care?

Yes, but it has a growth problem. European companies can innovate. Scaling up from a small startup to a global competitor is where the continent consistently falls short, Hauser said.

The deeper worry is dependency. Europe still relies heavily on foreign suppliers for AI software and for the design tools used to create chips. Hauser is not arguing for isolation: he wants Europe to preserve its alliance with the United States. His line is direct. Europe should not become "a technology colony of the U.S."

For most readers, the practical upshot is this: the AI tools and services you use every day are built on infrastructure that Europe, and most of the world, does not fully control. Hauser thinks that is a problem worth solving before geopolitical tensions make it urgent.

Common questions

Is the AI bubble about to burst?

Hauser thinks some valuations will correct, but the largest and best-funded companies are likely to survive a downturn. A correction is not the same as a collapse.

Why does chip architecture matter to ordinary people?

More efficient chips mean AI services cost less to run, which can lower prices and reduce the energy bills and carbon footprint that large data centres currently rack up.