Locai raises £1m pre-seed to run on-device inference and protect sensitive data
This article covers Locai, an AI startup, which has raised £1m in a pre-seed funding round led by Fuel Ventures to commercialise off-cloud AI infrastructure that moves model inference onto users' devices. The move aims to support SaaS and desktop AI product startups by reducing variable cloud inference costs and improving data sovereignty, privacy, latency and reliability.
Locai, an AI startup, has raised £1 million in a pre-seed funding round led by Fuel Ventures to commercialise off-cloud AI infrastructure that moves model inference onto users’ devices. The raise is intended to scale go-to-market efforts aimed at SaaS and desktop AI product companies and addresses rising cloud inference costs and data sovereignty concerns.
Why it matters
Cloud-based AI inference typically charges per interaction and routes sensitive data through third-party servers. For companies building meeting tools, writing platforms, code assistants and customer support products this can mean unpredictable costs and harder-to-control data flows.
Locai’s approach lets inference run on laptops, workstations or dedicated hardware, which can reduce ongoing cloud fees and improve privacy, latency and reliability, including offline operation. The company points to a multi-year contract with B2Space where deployment of AI agents at the edge of space cut bandwidth costs by over 90%, a practical example of cost and connectivity benefits in constrained environments.
Inside the product
Locai builds infrastructure to combine on-device inference with cloud-based scale. The technical premise is that advances in consumer and enterprise hardware now allow modern devices to run 7–13 billion parameter models locally, supporting many enterprise use cases without constant cloud reliance.
The team says its work in the Google for Startups Accelerator 2025 cohort informed optimisations around high-efficiency models for consumer hardware. The product targets SaaS and desktop AI vendors that want to replace variable cloud API costs with a fixed infrastructure model while keeping sensitive data under their control.
Who are the investors?
The round was led by Fuel Ventures. The £1 million will be used to expand go-to-market activity focused on SaaS and desktop AI product companies seeking on-device inference options. Fuel Ventures highlighted Locai’s technical pedigree and prior deployments as a key rationale for backing the team.
In the announcement, Mark Pearson, Partner at Fuel Ventures, said:
Locai is tackling a critical, margin-eroding challenge facing SaaS as AI usage scales. Their deep-tech expertise and track record in deploying AI in constrained environments position them strongly to deliver sovereign AI at scale. We’re excited to support Joe and Saif as they help companies regain control over their technology and costs.
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Founder perspective
Locai was founded by Joseph Ward and Saif Al-Ibadi. The pair previously built a deep-tech company that used generative design for defence and aerospace engineering, including designing and testing the UK Ministry of Defence’s first generatively designed rocket engine and cutting design times by over 90%. That background in deploying AI in resource-constrained settings informs Locai’s focus on edge and on-device inference.
In the announcement, Joseph Ward, Co-founder at Locai, said:
For years, we’ve handed control of our most critical AI infrastructure to companies we don’t own and can’t influence. Inference costs keep climbing. Services get switched off without warning. Locai exists so that developers, governments and businesses never have to accept those terms again.
The bigger picture
Locai’s raise sits within broader moves by startups and organisations to reduce dependency on large cloud providers for core AI workloads and to meet growing demand for sovereign AI and tighter data control. As hardware improves and more efficient models emerge, on-device inference is shifting from niche to practical for many applications, especially where latency, privacy or connectivity are priorities.
The pre-seed injection from a UK investor highlights ongoing appetite among AI investors for infrastructure plays that can rein in operating costs and support regulated or sensitive use cases across the UK and Europe.
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