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.
• He warned 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.
• Europe risks becoming a "technology colony of the U.S." if it does not build more of its own critical AI and chip infrastructure, he said.

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 Amadeus Capital.

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

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 have "clearly gotten ahead of themselves." He also flagged 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 well-capitalised players like OpenAI and Anthropic can ride out a reset in market expectations even if smaller players cannot. When AI stocks rattled investors enough to push money into Apple in late July, it was a preview of the kind of turbulence he has in mind.

What does this mean for the chips that run AI?

Running AI is expensive, and the hardware doing it is hitting real limits. Chips are hard to cool. Memory is costly. Moving data between a processor and its memory burns enormous energy.

Hauser pointed to two approaches 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, which can be far faster and cheaper to run. "I never thought that we'd have a very fundamental change in the computer architecture as a result of AI," he told CNBC Tech.

Neither is in your laptop today. Both are active research areas. Hauser argued the shift could prove 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 startup to 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 isn't 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 concrete: the AI tools you use every day are built on infrastructure that Europe, and most of the world, does not fully control. Hauser thinks that needs fixing before geopolitical tensions make it urgent.

Common questions

Is the AI bubble about to burst?

Hauser thinks some valuations will correct, but well-funded survivors are likely to weather 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.