Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
London-based start-up Fractile is in talks to raise more than $200mn as part of a growing group of UK chip companies seeking to challenge Nvidia’s dominance.
Fractile, backed by former Intel chief executive Pat Gelsinger and Nato’s Innovation Fund, is in discussions with investors including venture capital firm Accel to raise new funding at a $1bn valuation, according to people familiar with the matter.
A deal has not yet been finalised and talks could still change, they added.
Founded in 2022, Fractile is one of several British start-ups aiming to capitalise on soaring demand for computing power by building AI chips that are faster than Nvidia’s. Its fundraising comes a month after 25-year-old British entrepreneur James Dacombe raised $220mn for his AI chip start-up Olix.
Investor interest in potential challengers to Nvidia has been reignited amid growing signs that the $4.3tn US chip giant’s traditional GPUs face limitations in so-called AI “inference”.
This has led Nvidia to step up efforts to defend its dominance. This month it launched a new chip dedicated to running AI apps more quickly and efficiently following its $20bn deal with Al chip start-up Groq in December.
Like Groq and Olix, Fractile’s chips rely on a different kind of memory technology to Nvidia’s GPUs — static random access memory or SRAM — to improve the speed and cost of AI inference, with a focus on both hardware and software.
The start-up is also tapping growing interest from governments around the world for homegrown “sovereign” AI capabilities. Last month it announced plans to invest £100mn over the next three years to expand in London and Bristol, including a new industrial hardware engineering facility.
However, other UK chip ventures have proven less successful. Graphcore, a UK-based chip start-up, was acquired by SoftBank in 2024 for just above $600mn — less than the total amount of venture capital that the company had raised.
Fractile is led by chief executive Walter Goodwin, who completed a PhD in Oxford. The start-up’s team includes veterans of chipmakers Nvidia and Imagination Technologies, as well as several former Graphcore engineers.
Fractile raised early funding from the investment group Oxford Science Enterprises, which is in talks to invest in the latest deal. Prior to the most recent funding talks, it had raised about $15mn of seed financing from investors including Kindred Capital and the Nato Innovation Fund.
Fractile, Accel and OSE declined to comment.
