UK Sovereign AI Fund launches with £500M, compute access, and fast-track visas to back world-class AI companies

and development.

Very cool. Well, thanks so much for joining show. Great to meet you.

Yeah, enjoyed the conversation. Have a great rest of your day.

Thanks for having me on, guys. Have a great day. Appreciate it.

Goodbye.

Cheers.

Up next, we have Pipa Lamb returning to the show from Sweet Capital alongside James Wise from Bington Capital Partners. I believe they are in the waiting room. Uh, calling in from across the pond. Are you both over in the UK today?

They better be.

Yeah, we have given the news.

Well, welcome to the show. Uh why don't uh Pippa, why don't you reintroduce yourself and James since it's the first time on the show, you can introduce yourself as well.

Yeah, big day. James' first time on TVPN, guys.

Yes, we're very excited.

Fantastic to have you.

Uh yeah, so those I haven't met before, I'm Pipam. I'm a partner here at Sweet Capital. I'm also an active angel investor here. Um and I also scout with A6MZ, but generally sort of sit between the ecosystems of the US and the UK tech.

Wow. How do you I I didn't know you were you were the triple threat there. How do you how do you decide who gets who gets what

who gets the deal blow? That's interesting.

No.

Yeah.

Secret secret.

Secret James.

James.

Yeah. First time caller but longtime viewer. Thanks guys. Great to have you

having me on. Um so I'm a general partner at Balderson Capital. We're a 7 billion venture firm. We're based here in London and we used to be called Benchmark Europe. There we go. We got the buzzer. Um, so back back in 2001, we were benchmark Europe. We we uh we spun out in 2010 when the European market really took off

and uh for the last four months I've also been helping set up the UK's sovereign AI fund.

Okay. Yeah. Take us through that. I think that's what we're here to talk about. Uh how long have the talks been going on? How big is the fund? What's the strategy? What makes it unique in that it's uh so linked to the UK specifically?

Yeah. Well, about a year ago, we kicked off this big AI opportunities plan. There was huge news about it at the time and we've been working through all the various parts of that and Piva can talk more about things we've been doing in data centers and compute. Um, but the fund was set off to really accelerate some of the UK's big uh UK AI successes. Um, but with a lot more than capital. So, we've got about 500 million pounds. Uh, it's a starting point. It's the entry ticket in this game. Um, but more importantly, we're providing uh access to UK supercomputers here. So, huge amount of compute. We're providing uh fasttrack visas. We're providing unique data sets. We're providing government as a customer. So procurement through government basically to give a lot of the companies say they could benefit from working with the government a massive boost.

Yeah. I have to say that supercomputer is such an underrated term. Whoever thought to rebrand supercomputer to data center

terrible

is an idiot.

Terrible.

Because data center sounds so boring and terrible.

Supercomput is awesome.

Not going to take my job. I'm so into supercomputers. What were you a super computer?

Yeah. Uh so but uh

it's your grandfather's data center, right? It's the supercomputers like well IBM used to build.

Yeah. Yeah. Yeah. And and and they have them in like cool scientific locations like CERN has one and like you always hear about oh they're doing astrophysics on them. There's so many cool things. Uh but uh that does link to you know where will the UK get the most leverage out of investing because I imagine that there's not a lot of value in just trying to like clone Google search or Instagram for Europe like th those platforms it's fine but at the same time sovereign AI does have value where in the stack is does that live in your mind? Yeah. So we're building uh out a whole range of talent, right? So we're going to be doing everything from electron to token, but obviously working with American partners doing that and international partners as well. Sometimes at the chip level, sometimes at the model level and then we're starting to focus on where the UK has huge advantages. So life sciences is a huge area for us, right? If you look at isomorphic, which is actually a spin out of Google, you know, they're based here in London. the whole team basically is European and they may be the closest we get to a company getting a drug all the way through to approval that's sort of endto-end AI design um outside of life sciences loads of stuff in physics and material sciences so a lot of the uh AI science end of the spectrum rather than the AI slop end of the spectrum.

Yeah. Uh, Pipa, are you seeing uh are you seeing like a an effect where entrepreneurs from around Europe are moving to London in the same way that folks from Chicago move to San Francisco to do startups? Like I is there is there a proper movement to make London like the destination for ambitious European founders these days? Yeah, I think it's it, you know, I obviously fairly biased having spent a lot of of time here, but I think that the UK has always battered above its weight in terms of the deep R&D pockets we have here, you know, in terms of universities, the talent that are coming out of the local schools. Um, that's already created a very fertile ecosystem. And I think that, you know, one of the reasons we wanted to jump on here today was because it feels like, you know, UK is having a bit of an AI moment. It's not to say that we weren't already at the forefront of many of the innovations happening here. You know, of course, people always talk about Demis Hannah Sabas from you know, DeepMind that was founded in the UK. Uh obviously we would have loved to have kept that here, but of course it also went with Google. uh but you know we have long been at the forefront of

I think it's super critical that that they they deep mind maintains such a big presence in in the UK because you guys now at the sovereign AI fund if someone wants to

leave Deep Mind spin out like you guys can be there to provide capital and

exactly and that's what we're we're seeing now um I think both from the idea that we want to be an AI maker not just an AI taker we're seeing you know grassroots innovation come out of the schools here but as you say we're also having people either leave Deep Mind um also in terms of our partners across in the US I think you know James can correct me if I'm wrong I feel like a lot of the uh you know the first destination headquarter within Europe is usually in London I think that that is pretty much most of the large AI companies we've had um so I think that there is definitely uh you know it's always been a good hub for AI but we are seeing a lot of additional tailwinds of which sovereign AI is one of them at the moment as well

we went through this period last year and I it might still be going on. I don't really have a pulse check on it where uh every AI company's seed round was in like the hundreds of millions of dollars and I imagine that you're not going to spread this fund over just five companies and so do you think that

gone it's one

it's one bad but I mean do you imagine uh being uh like like investing alongside other funds and doing more structured rounds where a lot of capital comes together to take like big swings or is there actually some sort of structural shift in the type of startups that are getting built today where 5 10 20 million can actually uh put some points on the board early on and get in the game in a meaningful way.

I can see that you guys can uh make a number of bets on the app layer. about energy more science focused Neolabs Neo cloud like I feel like

five 500 will like really can kind of like seed a bunch of different players but

but yeah how are you thinking about like the dynamics of like early stage startup fundraising right now?

Yeah, I mean in the UK actually we are seeing those hundred million and even billion dollar seed rounds now. So there's a rumored billion dollar seed round in a uh in a founder who's out of Deep Mine which is incredible. Um, and there's there's been a bunch of those uh in the last few months, which is great. The fund is actually doing it the other way around. So, we're saying we're going to give you tens if not hundreds of millions of dollars possibly of government procurement contracts, right? If you can build it, if it's good enough, if you are world class, we're the customer. We're ready to buy.

Uh, same thing with compute. We're able to give a sort of, you know, a significant amount of compute to early stage companies. The quid proquo is, hey, the taxpayer is taking all this risk backing you. what's our upside, right? We want to be on the cap table, right? We want to do it on commercial terms. It's, you know, going to be on the same terms as an index, as a Boulder turn, as an Axel, as a A6 Z, whoever's there. We're going to be good partners, but the money isn't just about unlocking upside and getting uh you know, getting on the cap table. It it's also about helping the companies to some degree and obviously, you know, still 510 million can make a difference. So, I don't want to be like too flippant about it. You know, those things early stage do matter. Yeah.

Um, but you know, we're here to help the taxpayer get a bit of benefit from all the risk we're taking supporting all the AI companies.

Yeah,

I think that's also one of the things that jumped out at me as well is, you know, as a commercial VC, it's hard to compete purely on capital, right? Especially in AI right now is where the numbers become so so huge. Um, I think that something I've been really excited to see from the sovereign AI fund is ex exactly as James said is this kind of hands-on ops help whether it's how to navigate large data sets that the government may have access to that you know uh portfolio companies will will have help navigating uh whether it be early procurement opportunities as James said and then obviously we're going back to the the a million GPU hours of compute from the supercomputer uh uh which is you know a huge huge help. So you know it's it's not purely trying to convey purely on a capital basis which I think you know frankly would not play to the strengths of of what the fund can do.

So AI is extremely popular in China and India deeply unpopular in America. Where do you think the UK will land? Do you think there's a chance that uh that the population broadly will uh be supportive of artificial intelligence? They're like, "AI allows me to spend more time at the pub."

That's the way to sell it. Yeah,

that's what I'm saying.

No, look, the UK, we've been pretty uh strong in early adopters almost of every wave of new technology, right? Whether it's financial services like, you know, paying with this thing, the Brits are way ahead, earliest adopters in the world. Um, and when it comes to sort of first generation AI tools, your claudes and uh GPT, I think the UK is number one or two in Europe for adoption. So, so far so good, but of course there's loads of issues. You know, I I think that um there's going to need to be some really strong political leadership to explain to people the trade-offs between, you know, these things can be transformative, make your your wealth and your health and your security of your nation better off. At the same time, you know, we're going to need more energy. There's a load of issues we need to navigate on online harms and copyright. Uh so, some of those battles have been fought publicly. Some of them are still to come.

Yeah. um are you you say uh that there's an opportunity for the government to be a buyer. I think a lot of people jump to defense and military. I'm more interested in in if you're seeing any opportunities in non-defense sector uh opportunities for efficiency. I feel like at least in America, everyone laments like the DMV is a huge weight and like if they just had, you know, a piece of software instead of a physical form, things would speed up. uh are you seeing opportunities for startups to increase efficiency across non-military uh portions of the UK government?

Oh yeah. I mean I mean everywhere. And I think um you know there's a bunch of businesses here in Europe. I'm sure there are in the US as well who are using AI for you to complete procurement contracts. You know these like 400page things you have to do. So private companies have been doing that in response. You know, the UK government at least is already smartly using AI to read them as well and prioritize them, right? They don't make any decisions, but they help you help you navigate some of these processes. Same thing in in transcription and voice. Like obviously, we're already seeing GPS and doctors benefit hugely from being able to use these tools to quickly take notes and actually look at the patient rather than spend all their time sitting in front of the computer filling out the uh the health record. So, look, there's been some early wins and I think uh you know, part of the job at Sovereign AI is to work out which are the companies we should work with uh and the government to to see where else those wins are.

Yeah, that makes a lot of sense. Jordy,

super smart. I hope that you can work out like on the cap table to just say the United Kingdom because like I feel like as a founder, if you just see your country on your cap table, you're like, well, I got to I got to I got to

got to deliver.