Fractile Raises $720 Million in Series C at $7 Billion Valuation

Fractile has raised $720 million in a Series C at a $7 billion valuation, adding British government backing as the AI chipmaker targets a market supplied largely by Nvidia and a few large Asian chipmakers.

Thrive Capital, Founders Fund, Lightspeed and Redpoint led the financing. Google investment arm CapitalG, BlackRock, DST Global, Elad Gil, Balderton and SV Angel also participated. The UK government invested through its Sovereign AI fund and the British Business Bank, giving it a stake in the company.

Based in London and Bristol, Fractile designs chips for AI inference. Inference is the computing work that begins after a model has been trained, when it produces an answer or carries out a task. Each request uses computing power, and Fractile says its chips can run AI faster while using less energy and costing less.

The investment comes as the UK seeks to expand its AI industry and keep more of the economic value from British research in the country. AI Minister Kanishka Narayan said the funding is part of that effort. Britain has few chip factories, though it is known for chip design and is home to Arm, whose chips are used in billions of devices.

Fractile is now among Britain’s most valuable technology startups. Its valuation is below the $21 billion tied to Etched’s September financing. Etched is developing full AI hardware systems powered by its own chips.