Britain's Fractile raises $720 million for AI inference chips at a $7 billion valuation

British AI chip startup Fractile has raised a $720 million Series C round. The Financial Times and a Reuters source put its valuation at $7 billion, while the UK government said the round values the company at "over £5 billion."

Who invested

The round was co-led by Thrive Capital, Founders Fund, Lightspeed and Redpoint, joined by Alphabet's CapitalG, DST Global, BlackRock, T. Rowe Price and Balderton, among others. The UK government's Sovereign AI fund and the British Business Bank also invested, with the government saying the deal helps reduce reliance on overseas technology and gives Britain a greater stake in the hardware underpinning AI.

According to The Next Web, Fractile raised about $220 million at a valuation of roughly $1 billion as recently as May.

Stacking memory on logic

Founded in 2022 by AI researcher Walter Goodwin, Fractile argues that memory bandwidth, not raw compute, is the main constraint on AI performance. Its design stacks standard DRAM directly on top of the logic in each chip, aiming for more bandwidth than high-bandwidth memory (HBM) and more capacity than on-chip SRAM. The company designs its own chips, systems, software and compiler and conducts its own machine-learning research.

SiliconANGLE reported that Fractile expects its hardware to run large language models at several thousand tokens per second. Those gains have not yet been shown on a production chip; the company plans to ship its first chips and systems next year.

Sources: TechCrunch, GOV.UK, SiliconANGLE, The Next Web