Fractile, a UK-based AI chip startup, has secured a $220 million Series B funding round led by Accel, Factorial Funds, and Founders Fund—backed by Peter Thiel. Founded in 2022 by Oxford researcher Walter Goodwin, the company develops AI chips for inference tasks, aiming to deliver its products by 2027. The round also included investments from Conviction, Gigascale, O1A, Felicis, Buckley Ventures, and 8VC, alongside existing backers like the NATO Innovation Fund and Cocoa VC. Hermann Hauser, former Intel CEO Pat Gelsinger, and serial founder Stan Boland joined as angel investors.

Fractile targets data center builders and AI firms, claiming its chips can run models 25 times faster at 10% of current costs. With plans to hire across the UK, US, and Taiwan, the startup faces a daunting challenge: dominating a market led by Nvidia, the world’s most valuable company. The funding underscores investor confidence in Fractile’s potential to disrupt AI hardware, though scaling against established giants will require strategic breakthroughs.