UK AI Chip Startup Fractile Announces £100 Million Expansion Plan
February 10, 2026
In a significant boost for the UK's domestic semiconductor ambitions, British AI chip startup Fractile has unveiled a major £100 million (approximately $137 million) investment plan to expand its operations over the next three years. The move underscores the intensifying global race to develop specialized hardware capable of powering the next generation of artificial intelligence.
The expansion, confirmed by the UK's Department for Science, Innovation, and Technology (DSIT), will see Fractile grow its team and scale its existing sites in London and Bristol.
A central component of the plan is the creation of a new hardware engineering facility in Bristol. This facility will be tasked with transforming Fractile's chip designs into complete AI systems. According to the DSIT, the new site will also host a testing lab where companies can evaluate software designed for future high-performance computing infrastructure, which aims to run powerful AI models significantly faster than current technology allows.
AI Minister Kanishka Narayan highlighted the strategic importance of the investment, stating, "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. 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." Founded in 2022 by Dr. Walter Goodwin, a former PhD student at the University of Oxford’s Robotics Institute, Fractile emerged from stealth mode in July 2024 after raising $15 million in seed funding. The startup has attracted notable backing from investors including Kindred Capital, the NATO Innovation Fund, and Oxford Science Enterprises. Its investor roster also features industry veterans such as former Arm and Acorn Computers executive Stan Boland and, as of January 2025, former Intel CEO Pat Gelsinger.
The substantial capital injection positions Fractile to accelerate its R&D and scale production at a critical juncture for the AI hardware sector. The company's focus on inference—the process of running trained AI models—targets a key bottleneck in the widespread deployment of AI. This expansion not only strengthens the UK's homegrown tech ecosystem but also signals its intent to compete in the strategically vital and capital-intensive semiconductor industry, reducing reliance on foreign chip designers and manufacturers.
Source: datacenterdynamics
