Labour’s AI fund joins $6.5bn deal for Anthropic-backed chipmaker
Labour’s AI fund joins $6.5bn deal for Anthropic-backed chipmaker
Matthew FieldSun, November 1, 2026 at 9:00 AM UTC
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Walter Goodwin, an Oxford University robotics expert, founded Fractile in 2022 - Sportsfile for Web Summit via Getty Images/Sam Barnes
A fund launched by Labour to back “home-grown” AI champions is poised to inject millions of pounds into a chipmaker as part of a deal valuing the start-up at $6.5bn (£4.8bn).
The Sovereign AI Fund, which was set up earlier this year to invest in promising technology ventures, has joined a funding round for Fractile, a London-based company backed by the US AI giant Anthropic.
Founded by Walter Goodwin, an Oxford University robotics expert, Fractile has already raised hundreds of millions of pounds this year and has a deal with Anthropic to supply it with cutting-edge chips.
It is expected to raise in the region of $700m in a deal to be announced as soon as next week. Sources said the Sovereign AI Fund is among the new investors taking a stake in the start-up.
Fractile has emerged as one of a clutch of fast-growing British start-ups that have secured lofty price tags amid the AI boom.
The deal is expected to value it at about $6.5bn, a significant jump from about $1bn earlier this year.
The taxpayer-backed deal comes despite concerns about the sustainability of a vast surge in spending by AI giants, which have pledged to spend trillions of dollars on powerful chips and data centre infrastructure around the world.
These spending commitments have driven up the valuations of tech companies that power AI systems, such as Anthropic’s Claude or OpenAI’s ChatGPT.
Anthropic reportedly has a $250m deal with Fractile for it to supply specialised chips which it claims will bring down the cost of intensive AI tasks.
Anthropic is targeting a $2tn float within weeks, in a deal that will test the appetite of financial markets to keep backing the AI boom.
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Other British start-ups have seen their valuations jump this year. Ineffable Intelligence, which was founded by a former top DeepMind researcher, secured a valuation of $5.1bn just months after it was founded.
Olix, another chip start-up, saw its valuation triple in six months to more than $3.3bn.
The Sovereign AI Fund, which typically invests between £1m and £10m in its deals, invested in both businesses as their values surged.
It was originally backed with £500m in taxpayer funding. John Healey, the Chancellor, handed the AI fund an extra £60m as part of last week’s Budget.
The fund is chaired by James Wise, a partner at Balderton Capital, and run by Suzanne Ashman, a venture capitalist and daughter-in-law of Sir Tony Blair.
It is understood the fund invested at a slightly lower valuation than the final $6.5bn value Fractile has secured.
The funding round for Fractile is being led by Silicon Valley funds including Lightspeed and Redpoint, and it has received investment from Thrive Capital, an early investor in OpenAI led by Joshua Kushner, the brother of Donald Trump’s son-in-law.
Fractile was also previously backed by Founders Fund, an investment firm led by Peter Thiel, the billionaire founder of Palantir.
Founded in 2022, Fractile has said it intends to develop a new kind of chip designed for cutting-edge AI uses. It does this by fusing the memory components onto a processor to speed it up.
Fractile and the Government declined to comment. Lightspeed and Thrive were contacted for comment.
Source: “AOL Money”
