Fractile Raises $15 Million to Develop New AI Chip

U.K. startup Fractile has exited stealth and announced it raised $15 million in seed funding to develop a new artificial intelligence (AI) chip.

The company will use the investment to grow its team, build partnership and accelerate its progress to its first products, Fractile said in a Friday (July 26) press release emailed to PYMNTS.

“Fractile’s approach supercharges inference, delivering astonishing improvements in terms of speed and cost,” Dr. Walter Goodwin, CEO and founder of Fractile, said in the release. “This is more than just a speed-up — changing the performance point for inference allows us to explore completely new ways to use today’s leading AI models to solve the world’s most complex problems.”

The company’s design for AI chips can run AI models 100 times faster and 10 times cheaper than conventional approaches, according to the release.

With these chips, Fractile aims to provide a solution to the current situation in which AI models are very expensive to provision and run at scale, AI performance is inhibited, potential AI performance is restricted, and the opportunity for AI models to drive differentiation is limited, the release said.

Fractile’s seed round was co-led by Kindred Capital, NATO Innovation Fund and Oxford Science Enterprises, per the release. It brings Fractile’s total funding to $17.5 million.

Competition is intensifying in the AI chip market as companies vie for a share of this rapidly expanding industry, and Big Tech firms are racing to develop custom chips that supercharge the efficiency and cut the costs of AI, PYMNTS reported in April.

Nvidia’s GPUs now power the most sophisticated AI models, propelling the company to a multitrillion-dollar valuation, but demand sometimes outstrips supply. This scarcity is reshaping the tech landscape, as giants like Microsoft, Meta and Google develop proprietary AI processors and chipmakers like AMD and Intel pour resources into competing products.

On July 16, it was reported that San Francisco Compute Co. raised $12 million in an early funding round to launch a trading platform for computing power. With the platform, the company aims to help companies working with AI get access to the semiconductors they need.