Pressure is mounting on SoftBank to dual-list U.K. chip designer Arm now that the deal with Nvidia is off.

Arm is widely seen as the jewel in the crown of the U.K. tech industry and investors in Britain want it to be listed in its home country.

Julian Rowe, general partner at tech investment firm Latitude, told CNBC that the U.K. government should be doing all it can to make sure homegrown successful tech businesses like Arm are not being sold too early and too cheaply to international acquirers, or choosing to take their valued listings overseas.

“History will tell you that Nasdaq or NYSE might be a more natural home for a chip designer like Arm, but that underestimates the degree to which Arm is arguably the least known success story in U.K. tech and the special position it can occupy through a London listing,” Rowe said. “It has the potential to become a standard bearer in the U.K. high growth tech scene.”

Laura Citron, CEO of London & Partners, London’s business growth agency, told CNBC that the U.K. capital is the perfect place for Arm to go public. “London is home to Europe’s largest technology ecosystem and it is a global financial center,” she said. “This makes it a highly attractive destination for tech company IPOs.”

Citron added: “Arm is a U.K. tech success story, so London would be an ideal home as it becomes a public company.”

SoftBank was planning to sell Arm to Nvidia for $40 billion but the deal collapsed earlier this month amid growing regulatory scrutiny, prompting SoftBank to return to its original plan of an Arm IPO instead.

Masayoshi Son, the CEO of SoftBank, told investors on an earnings call that Arm’s IPO would likely take place on New York’s Nasdaq stock exchange, dealing a blow to the tech ambitions of the London Stock Exchange.

“The U.S. … that’s the market that we are looking at when it comes to listing Arm, and most likely Nasdaq,” Son said. “But wherever it is, the U.S. is the market that we’re looking at for the listing of Arm.”

Arm co-founder Jamie Urquhart told CNBC via email: “The decisions SoftBank make will naturally consider their own needs rather than Arm’s per se.”

“The Arm team leading the company will also have some bargaining power since they will be important in terms of a listing – they will have to sell it,” Urquhart added.

If Arm is listed in New York instead of London, it will be a lost opportunity for the U.K. technology industry, according to Alex Lim, managing partner at Blossom Capital, a venture capital firm in London.

“By bringing the business to list here, Softbank and Arm would be endorsing the U.K.’s future potential to build great companies and that signal would be very powerful to those who are founding businesses or investing in innovative tech here,” he said.

Qualcomm Chief Financial Officer Akash Palkhiwala told CNBC Monday that Arm is an incredibly valuable technology company and that it will be successful wherever it lists.

“They have options and they’re all good options in my mind,” he added. “They’re going to find investors. It’s a technology and an asset that is very relevant to the industry. It’s becoming more relevant as phone chips migrate into other devices and think they’re in a tremendous position.”

Headquartered in Cambridge, England, Arm was spun out of an early computing company called Acorn Computers in 1990. The company’s energy-efficient chip architectures are used in roughly 95% of the world’s smartphones. Arm has around 6,000 staff globally and 3,000 in the U.K.

The company was dual-listed in London and New York until 2016, when SoftBank bought it for $32 billion.

“When Arm went public in ’98 we went for a dual listing,” Urquhart said, adding that the company was advised to do this by its sponsor banks. “It was suggested that the U.S. better understood the value of technology companies, but having a home listing would mitigate the risk of Arm becoming an orphan on the U.S. exchange.”

The U.K. government hailed SoftBank’s acquisition of Arm as a major success at the time, but it’s now reluctant to see the semiconductor firm in the hands of an overseas company. The ongoing global chip shortage has made nations around the world think about where chips are designed and manufactured.

The U.K. wants its biggest and best tech companies to list on home soil so that they can benefit the wider economy and prop up the stock market. However, over the years, many have crossed the Atlantic to go public in New York to try to achieve higher valuations.

The most valuable tech companies on the Nasdaq include Apple, Microsoft, Amazon and Alphabet, which all have a market value of over $1 trillion. Meanwhile, the most valuable tech firms on the London Stock Exchange are all valued at less than $50 billion.

Hussein Kanji, a venture capitalist at Hoxton Ventures in London, told CNBC that it would be “irrational” for SoftBank to prioritize a U.K. listing over a U.S. listing. “There is no upside in listing in the U.K. and enough downside,” he said, pointing to a lack of research, low valuations and the press. “You need upside with downside to convince people to switch.”

Last year, a number of household U.K. start-ups listed on the London Stock Exchange but the IPOs didn’t all go to plan.

Food delivery app Deliveroo, for example, saw its share price tank almost immediately after it went public. Cybersecurity firm Darktrace also had a bumpy ride, while fintech firm Wise is valued at considerably less than some of its U.S. rivals.

“Whilst London’s markets have disappointed for recent listings, Arm has a long history of being listed in London, and there’s a big appetite here to own a piece of one of Europe’s true world-leading deep-tech companies,” Harry Briggs, a partner at Omers Ventures Europe, told CNBC.

A SoftBank spokesperson told CNBC that a final decision on Arm’s listing destination has not been made. The London Stock Exchange declined to comment.