Fractile, a firm that builds the chips and systems that frontier AI models run on, has raised £540 million in a Series C round co-led by Thrive, Founders Fund, Lightspeed and Redpoint. Balderton, the UK Government's Sovereign AI Venture Fund, the British Business Bank and CapitalG also participated. The round puts Fractile’s valuation above £5 billion.
Fractile, founded in 2022 by Walter Goodwin, designs inference accelerators and rack-scale systems, the hardware that runs AI models when they generate answers. Most AI chips rely on high-bandwidth memory (HBM) and share near-identical designs. Fractile instead stacks DRAM memory directly on top of its logic. This gives far higher memory bandwidth than HBM and much more capacity than SRAM designs, so large models can run at thousands of tokens per second, even at very long contexts. Fractile owns its entire stack, designing its own chips, systems and software and doing its own machine learning research. Many AI chip makers hand parts of the design to outside partners instead.
Inference is growing exponentially, with frontier models processing more than ten times more tokens every year. Agents, heavy reasoning and coding tools now use far more tokens per task than chat, and the speed a user experiences is limited by memory bandwidth, which has scaled far more slowly than raw compute. Fractile's investors say its accelerators can serve the most advanced models more than ten times faster, at a fraction of the cost. The round comes six months after Fractile raised £160 million, and two years after it secured £5 million from the Advanced Research and Invention Agency (ARIA). The news comes a fortnight after the Budget, where the Chancellor confirmed a further £140 million for Sovereign AI and a new focus on Physical and Industrial AI.
The funding will help Fractile scale its AI hardware technology in the UK, where it is based across London and Bristol. It has been recruiting industry veterans who have shipped silicon at scale, across software, hardware, operations and supply chain.
Walter and the team at Fractile are taking on an ambitious challenge, with the potential to make a significant contribution to the global future of AI hardware. Their approach brings together deep expertise across chip design, software, and machine learning, and we believe it has the potential to compete with the very best globally.
Fractile is pushing the frontier of AI forward by rearchitecting the hardware stack. Walter and his team are building chips designed to work faster and at greater capacity, allowing AI to reach new potential, scaling faster and more cost effectively. This is British innovation at its best - exceptional technical minds focused on building technology that can compete and win on a global stage. We’re proud to be backing them at this critical stage of growth.
Fractile represents the very best of British ambition, bringing together world-class chip design, engineering and AI expertise to develop faster, cheaper and more energy-efficient hardware.
Walter and the Fractile team made a bold bet back in 2022: that the real limit on frontier AI would be how fast it can produce useful outputs, and that the only way to fix that at scale was to rebuild the hardware itself. By stacking DRAM directly on top of logic, and owning every layer from silicon to systems, software and core ML research, they have built an architecture that delivers both speed and scale. That kind of full-stack ambition is rare for a chip company, and it makes Fractile one of the most exciting places in the world right now for engineers who want to work on AI's hardest problems.
