Locai, a deep-tech off-cloud AI infrastructure startup, has raised £1 million in a pre-seed round led by Fuel Ventures. It develops infrastructure that shifts AI inference from cloud servers onto users’ own devices, enabling companies to replace variable cloud API costs with fixed infrastructure spend. The funding will be used to scale go-to-market efforts targeting SaaS and desktop AI product companies.
The startup addresses rising costs and privacy concerns linked to cloud-based AI inference, where every user interaction generates ongoing fees and requires data to be processed on external servers. Its approach enables AI processing to run locally on laptops, workstations or dedicated hardware, delivering faster performance, improved privacy and reliability, including offline use. This allows companies building meeting tools, writing platforms, code assistants and customer support products to avoid per-user interaction billing and maintain control over sensitive data.
Locai’s development is shaped by its participation in the Google for Startups Accelerator 2025 initial cohort, where it gained insight into high-efficiency AI models designed for consumer hardware. It is building infrastructure that combines on-device inference with cloud-based scale, responding to growing demand for sovereign AI and control over data processing. Advances in hardware now allow modern devices to run 7–13B parameter models locally, supporting many enterprise use cases without relying on cloud infrastructure.
The founders, Joseph Ward and Saif Al-Ibadi, previously built a deep-tech company focused on generative design technologies for defence and aerospace engineering, including designing and testing the UK Ministry of Defence’s first generatively designed rocket engine and reducing design times by over 90%. Their experience includes deploying AI systems in resource-constrained environments, which informs Locai’s approach to edge-based AI. The need for this infrastructure has been demonstrated through a multi-year contract with B2Space, where Locai deployed AI agents at the edge of space and reduced bandwidth costs by over 90%.
For years, we’ve handed control of our most critical AI infrastructure to companies we don’t own and can’t influence. Inference costs keep climbing. Services get switched off without warning. Locai exists so that developers, governments and businesses never have to accept those terms again.
Locai is tackling a critical, margin-eroding challenge facing SaaS as AI usage scales. Their deep-tech expertise and track record in deploying AI in constrained environments position them strongly to deliver sovereign AI at scale. We’re excited to support Joe and Saif as they help companies regain control over their technology and costs.
