In a development highlighting the intensifying national security scrutiny within Britain's strategic technology sector, the co-founder of UK artificial intelligence chip startup Fractile has left the company. The departure follows internal concerns regarding his academic background and earlier associations with Chinese institutions.
Co-Founder's Exit Follows Background Questions
Yuhang Song, who served as Fractile's chief technology officer, departed the business in May 2024. The move came after questions emerged internally about his past academic ties, as first reported by Sifted. Song had previously studied at Beihang University in Beijing before completing a doctorate at the University of Oxford.
Defence-Linked Academic Background Raises Flags
Beihang University forms part of China's designated 'Seven Sons of National Defence'. This group of institutions operates under the oversight of China's Ministry of Industry and Information Technology and plays a significant role in the nation's defence research programmes.
It is estimated that approximately sixty per cent of Beihang's research budget is allocated to defence-related projects. The university also features on the US Commerce Department's entity list, which imposes restrictions on organisations considered to present potential national security risks. However, it is not currently subject to UK sanctions.
Several individuals close to Fractile indicated that these academic links became increasingly difficult to reconcile with the company's strategic ambitions and funding prospects. A spokesperson for Fractile stated that Song "left to pursue other technical and business interests in 2024", noting that early-stage technology companies often experience founder transitions as projects evolve.
There is no suggestion that Song engaged in any wrongdoing, nor is there any indication that intellectual property was improperly transferred. Song has not publicly commented on the circumstances of his departure.
Fractile's Profile and Backing
Fractile, founded in 2022, is developing next-generation semiconductor chips specialising in AI inference. This is the critical stage where large language models process inputs and generate outputs. The company promotes its technology as offering superior speed, cost-effectiveness, and energy efficiency compared to hardware from established rivals like Nvidia.
The startup has attracted notable financial backing from high-profile investors. Its supporter list includes:
- The NATO Innovation Fund
- Kindred Capital
- Cocoa VC
- Hermann Hauser, co-founder of Arm
According to reports, Fractile secured $15 million (approximately £11.07 million) in funding during 2024 and has since obtained a further $22.5 million.
Broader Security Scrutiny Impacts UK Tech Sector
This incident reflects the tightening geopolitical landscape confronting UK startups operating in sectors with potential national security implications, such as artificial intelligence and defence technology.
Senior UK security and government figures have repeatedly highlighted these risks. MI5 Director General Ken McCallum warned last year that China presents a persistent national security threat. Ministers have also cautioned that the academic research and startup ecosystems are vulnerable to foreign state influence.
A government-commissioned review into academic security in 2024 followed warnings that Chinese-linked funding could potentially endanger sensitive technologies. A subsequent parliamentary intelligence report described UK universities and research institutions as providing a "rich feeding ground" for the potential transfer of intellectual property.
Funding Barriers for Founders with Specific Ties
Suki Fuller, a fellow at the Council of Competitive Intelligence Fellows who advises startups and NATO-backed programmes, explained the practical consequences for founders. She stated that individuals with links to certain Chinese institutions can face severe obstacles when seeking investment capital.
"If a company has any co-founders or senior executives who studied at one of these universities, US funding is effectively off the table," Fuller said. She added that investment funds with state-linked limited partners are also likely to withdraw from deals.
"It's a brutal reality," Fuller concluded. "People can lose control of something they helped build because of where they studied, not because of anything they've done wrong."
