Fractile secures UK government backing in major chip funding round

Fractile has secured backing from the UK Government’s Sovereign AI Venture Fund and the British Business Bank in a funding round worth over £500 million. The Series C values the London- and Bristol-based AI hardware startup at over £5 billion, with CapitalG, Lightspeed and Redpoint also participating.

The company is developing chips intended to make AI faster, more energy efficient and less costly. Its approach spans chip design, software and fundamental machine learning research, rather than focusing on hardware alone. The funding will support scaling its technology in the UK, while the company plans to expand its presence in Bristol.

The government sees the investment as part of an effort to retain more of the jobs, expertise and economic value generated by British technology companies. Backing domestic chip designers and hardware businesses is intended to strengthen sovereign capabilities and reduce dependence on overseas supply chains. The individual investment amounts from Sovereign AI and the British Business Bank were not disclosed.

The deal follows further £140 million backing for Sovereign AI announced at the Budget, including £60 million for investments and £80 million for its R&D Procurement Scheme. The programme is also expanding its focus to physical and industrial AI, including robotics, autonomous systems and advanced manufacturing.