Fractile, a British startup building chips for AI, has closed a Series C round that values the company at over £5 billion, the UK government said on Wednesday. The government's Sovereign AI Venture Fund and the British Business Bank both invested, in a round the government described as worth over £500 million and that other reporting puts at $720 million.
CapitalG, Lightspeed and Redpoint also backed the round, according to the government announcement. Separate reporting lists Thrive Capital and Founders Fund among the investors and places the valuation at roughly $7 billion.
Fractile, which is based across London and Bristol and was founded in 2022, describes itself as a chip-first frontier AI company. It works across the full stack, from chips to software and fundamental machine learning research, with the aim of running large language models faster on its own hardware.
“Fractile represents the very best of British ambition, bringing together world-class chip design, engineering and AI expertise to develop faster, cheaper and more energy-efficient hardware.”— Kanishka Narayan, UK AI Minister
Key facts
- 01Fractile's Series C values the AI chip startup at over £5 billion, per the UK government.
- 02The UK government puts the round at over £500 million; other reporting puts it at $720 million.
- 03Backers include the Sovereign AI Venture Fund, British Business Bank, CapitalG, Lightspeed and Redpoint.
- 04CEO Walter Goodwin says the funding will let Fractile ship its first chips and systems next year.
- 05Fractile, founded in 2022, plans to expand its presence in Bristol.
The company's design stacks DRAM, the most common type of computer memory, directly on top of each chip. The approach targets the tradeoff between memory speed and capacity that limits how quickly large models can run.
Fractile CEO Walter Goodwin wrote in a LinkedIn post that the money will let the company ship its first chips and systems next year, adding that "there is still a lot of work ahead." Fractile also plans to expand its presence in Bristol.
The investment is part of a wider UK push to own more of the AI hardware stack. Alongside the announcement, the government said the Chancellor confirmed an additional £140 million for Sovereign AI, with £60 million for the fund's investments and £80 million for an R&D procurement scheme. The British Business Bank's financial capacity was raised by £5 billion to £30.6 billion.
“Fractile is pushing the frontier of AI forward by rearchitecting the hardware stack.”— Leandros Kalisperas, Chief Investment Officer, British Business Bank
Sovereign AI typically writes equity cheques of around £1 million to £10 million, and the government did not disclose how much it put into Fractile.
Business Secretary Jonathan Reynolds called Fractile "a fantastic British success story" and said the fundraise "will boost our ability to make the chips and cutting-edge tech powering AI here at home."
Working on something we should cover, or seeing a story we missed? Send leads, documents, or feedback to hello@aichatdaily.com. For sensitive tips, see our secure tips page for Signal and PGP options.
Spotted an error? Email hello@aichatdaily.com with the URL and the issue, or read our full corrections policy.
