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The investment will see the expansion of the company’s sites in both London and Bristol
This week, the government has announced that UK-based chip startup Fractile has pledged to invest £100 million in its UK operations over the next three years.
The investment covers the expansion of its London and Bristol sites, bringing a major boost to the UK’s emerging AI hardware ecosystem.
In a speech today, the UK’s AI Minister Kanishka Narayan praised the move and called on fellow AI entrepreneurs to take more risks.
“I am setting Britain’s AI leaders a challenge – bang the drum for start-ups, spread the opportunities to every corner of our country, and embrace risk. This is how we leverage AI to serve hard-working people, our economy, and British values,” said AI Minister Kanishka Narayan. “By investing in British tech innovation, just as Fractile is doing today, we can reinforce our leadership in AI and boost our influence on the global stage.”
Fractile was founded in 2022 with the aim of developing AI chips built specifically for inference, the stage where large language models generate outputs.
The company’s core tech focuses on allowing AI inferencing to run in on-chip memory, thereby removing the need to move model parameters back and forth between separate memory and processors.
This architecture, Fractile claims, could allow for inference tasks to be run 100-times faster and 10-times cheaper than on rival chips.
Fractile is currently targeting chip fabrication in the second half of 2026.
For the UK government – which has long been dreaming of a homegrown tech superstar – the success of Fractile could represent a chance to reduce reliance on US tech giant, NVIDIA. Indeed, Fractile’s CEO Walter Goodwin was quoted in the 2025 release of the UK’s Compute Roadmap, a government plan that aim to see the UK shift from ‘AI takers, to AI makers’.
Fractile’s journey towards becoming a national champion of the UK’s tech sector has not been without bumps in its short existence so far.Earlier this month it was revealed that Fractile co-founder and former CTO, Yuhang Song, was forced to exit the business in 2024 due to his ties to Beihang University in Beijing.
Beihang University is one of China’s ‘Seven Sons of National Defence’, a group of universities overseen by the Ministry of Industry and Information Technology. These institutions unofficially have a close research relationship with the People’s Liberation Army, contributing around half their combined R&D budgets to military projects.
There is no suggestion that Song has engaged in wrongdoing, rather his expulsion is seen as an effort to sanitise the company, opening the door for future investment from the UK and the USA.
If Fractile is to the UK’s answer to NVIDIA, the company will need to scale up its investments rapidly in the coming years.
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