The UK government's Sovereign AI Fund has joined the latest funding round for Fractile, a London startup building AI inference chips, according to a report in The Telegraph. The round is expected to raise about $700 million at a valuation of roughly $6.5 billion, up from about $1 billion earlier this year.
Lightspeed and Redpoint are leading the round, with Thrive Capital also investing. Founders Fund backed Fractile earlier. Fractile and the UK government declined to comment, and the deal could be announced as early as next week.
Companies House filings show Fractile allotted about £577.4 million of new Series C shares between September 9 and October 23, most of it as Series C-3 stock at £1,452.35 a share. Tech Funding News puts the total at about $774 million.
Key facts
- 01Fractile is expected to raise about $700 million at a valuation of about $6.5 billion, up from roughly $1 billion earlier in 2026.
- 02Lightspeed and Redpoint lead the round; Thrive Capital and the UK's Sovereign AI Fund are also investing.
- 03Companies House filings show about £577.4 million of Series C shares allotted between September 9 and October 23.
- 04Fractile has an initial deal to sell about $250 million of inference chips to Anthropic and expects data center deployments in 2027.
Sovereign AI was set up earlier this year with £500 million of public money and received an extra £60 million for direct equity investments in last week's UK Budget. Balderton Capital partner James Wise chairs the fund, and Suzanne Ashman runs it. It typically writes checks of £1 million to £10 million, and the size of its Fractile stake has not been disclosed.
Oxford robotics researcher Walter Goodwin founded Fractile in 2022. The company designs inference chips that place SRAM memory next to compute, a different architecture from Nvidia's GPUs.
Fractile has an initial deal to sell about $250 million of chips to Anthropic and expects to deploy in data centers in 2027. The new round comes five months after a $220 million Series B.
The investment puts public money into a hardware company that has not yet shipped chips in volume, after a roughly sixfold rise in valuation within months. It also lands as investors weigh how much AI companies are spending on chips and data centers.
The deal adds to a broader shift in European venture funding. Deep tech and life sciences took 61% of European venture funding, up from 41% in 2025, according to Dealroom data.
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