Fractile, a UK-based startup specialising in cutting-edge AI chips, experienced the departure of its co-founder and former Chief Technology Officer, Yuhang Song, in May 2024. Now, reports have come to light indicating that the exit came amid increasing concerns regarding his associations with China, surrounding his educational qualifications and past affiliations with Chinese institutions, as reported by Sifted.
Established in 2022, Fractile aims to develop next-generation chips tailored for AI inference, where expansive language models generate outputs. The company asserts that its technology delivers enhancements in speed, cost, and energy efficiency compared to offerings from industry giants like Nvidia. Fractile has garnered substantial investment from prominent investors, including the NATO Innovation Fund, Kindred Capital, Cocoa VC, and Arm co-founder Herman Hauser. It secured $15 million (£11.07 million) in 2024 and has since obtained an additional $22.5 million.
Concerns were heightened due to Song’s academic history, which includes studies at Beihang University in Beijing, followed by a PhD from Oxford University. Beihang, regarded as one of China’s ‘Seven Sons of National Defence’, has close ties to the Ministry of Industry and Information Technology and plays a significant role in the nation’s defense research. The university is identified by the US Commerce Department as an organisation that poses national security risks, even though it is not subject to UK sanctions.
Despite these worries, there is no evidence that Song was involved in any misconduct or that any intellectual property was misused. However, his connections reportedly conflicted with Fractile’s strategic objectives. A representative from Fractile mentioned that Song departed to pursue other technical and business opportunities, highlighting that early-stage tech companies often undergo leadership changes as they evolve. Song has not made any public statements regarding the situation.
This development underscores the growing geopolitical challenges faced by UK startups operating within sensitive fields such as AI and defence. At the close of last year, MI5 Director General Ken McCallum alerted to the ongoing national security threat from China, with officials warning about the susceptibility of academic research and startup sectors to foreign state influence. A government-commissioned 2024 review into academic security, driven by concerns over Chinese-linked funding, outlined the possible risks to delicate technologies. A following parliamentary intelligence report characterised UK universities and research facilities as fertile grounds for the transfer of intellectual property.
Suki Fuller, a fellow at the Council of Competitive Intelligence Fellows and advisor to startups and NATO-backed initiatives, remarked on the obstacles encountered by founders connected to specific Chinese institutions. She pointed out that having co-founders or senior executives from these universities can greatly restrict access to US funding, with state-affiliated investors likely to withdraw their support. Fuller stressed the harsh reality that individuals may lose influence over their creations due to their educational backgrounds, regardless of any actual malfeasance.
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