Fractile announces £100m expansion amid wider push for UK AI leadership

Bristol will host a specialist software testing lab for AI inference

UK chipmaker Fractile has announced a £100m expansion in London and Bristol to advance AI chip technology, supporting the UK's ambition for AI industry leadership.

UK chip start-up Fractile has announced a £100m investment to expand its operations in London and Bristol. The investment will be rolled out over the next three years, will fund a new industrial hardware engineering facility in Bristol.

The announcement fits helpfully into a strategy adopted by the government of trying to encourage the founders of start-ups to scale their businesses in the UK and to encourage investors to back exactly this type of venture.

“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,” said AI minister Kanishka Narayan.

“This is how we leverage AI to serve hard-working people, our economy, and British values. 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.”

Shift to inference

Fractile’s chips are designed for inference – the stage after training where LLMs generate outputs. Engineers at the new Bristol site will integrate the inference chips into AI infrastructure and host a specialist software testing lab which will be custom built to support this future infrastructure.

The goal is to rethink chip architecture with the development of in-memory compute. If compute doesn’t have to move between memory and processors, that enables much faster and cheaper compute. That means that the powerful AI models that can potentially deliver such productivity and economic gains could be run far more efficiently, and with a vastly smaller energy requirement.

Right now, Nvidia remains the colossus of the AI chip market. But that domination is built on the demand for GPUs primarily for LLM training. If Fractile or other chip makers make serious progress with in-memory compute for inference, the assumption underpinning Nvidia’s value – that of demand for its GPUs continuing to rise every quarter as hyperscalers build out AI infrastructure – starts to look less solid.

Fractile was founded in 2022 by Dr. Walter Goodwin, a then PhD student at the University of Oxford’s Robotics Institute. The startup has raised $15m in seed funding from a round co-led by Kindred Capital, Nato Innovation Fund, Oxford Science Enterprises, and several angel investors.