Deeptech startup Locai has raised £1m in pre-seed funding to further develop its off-cloud AI infrastructure.
Currently, every user interaction generates ongoing fees for cloud providers on servers beyond the user’s control, turning business growth into a liability for both margin and data sovereignty.
Locai, which was part of the Google for Startups Accelerator initial cohort, addresses the escalating costs and privacy concerns driven by cloud-based inference, shifting AI inference off the cloud and onto the user’s own device.
The startup says this approach turns variable cloud API costs and growing margin liability into predictable fixed costs.
The pre-seed funding, led by Fuel Ventures, will be used to scale go-to-market efforts, targeting SaaS and desktop AI companies. This includes firms building meeting tools, writing platforms, code assistants and customer support products that are currently reliant on per-API-call cloud billing.
The aim is to support these businesses as they transition to a fixed-cost, on-device model, driving demand from CTOs, VPs of engineering and founders.
“For years, we’ve handed control of our most critical AI infrastructure to companies we don’t own and can’t influence,” says Joseph Ward, co-founder of Locai.
“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.”
In December, a major outage by US giant Cloudfare left much of the internet inoperable, temporarily taking down businesses like LinkedIn and Zoom.
