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Now want to get into a big conversation this morning. We are in the midst of London Tech Week. Lizzie, you'lso out and about founder's forum British AI business. Double Word the UK's first dedicated inference lab. It's one of the first companies that has been backed by the UK Government's Venture Fun for domestic AI startups. We've spoken to the Air Minister about this and I'm really delighted that we have Meriam Eric, who is the co founder and CEO of double Word, in the radio studio with us.
Welcome to Bloomberg Radio. Yeah, Meriam, I know that you've been right at the heart of this government activity with London Tech Week. You've been to Downing Street already. How do you think about the government's announcements in terms of helping businesses like yours?
So the government is taking a very different approach to how UK governments have typically treated the tech sector. So typically UK governments have had a very hands off approach, and unfortunately most of our competitive countries don't have a
hands off approach. And almost every single generational business that has ever been built has had a very hands on interventionist approach from their governments and so for the first time, what we're seeing from this government is wanting to back the strategically important AI companies of the future and really back them so that they not just start here, which plenty of companies do, but also stay here and scale here so we can really build generational companies in the
UK as well. But are you taking what the Starma administration is saying seriously when there's so much speculation about who's going to be the Prime minister and for example Andy Burnham, the Great Manchester may is talking about more regulation on tech. Yes, I think the tech sector gets painted with a very broad brush. I think it's very like the Keir Starmer administration as well also wants a
lot of regulation on big tech and social media. But I think that it's very different to the very innovative startup companies and scale up companies that are kind of British at its core, and they want to keep British and they're really putting kind of their money where their mouth is, and they've we are part of a five hundred million dollars sovereign AI fund. We have received a
compute allocation from them. They've also recently announced two days ago a one point one million pound fund to procure computees so we can build more supercomputers in this country. And so it does seem like they're taking this very very seriously. Although something I'm worried about is a change in government will lead to a change in the ministers in the Department of Sites and Technology that we think have been doing a very good job.
Okay, okay, some praise then for those ministers. I mean that the issue though, with picking the winners and losers in the in the UK simply that Britain isn't spending very much money. I mean, if you look at the trillions of dollars being used for the kind of infrastructure build out in the US, it pales into infra significant. But to understand that, it's sort of trying to pick the winners in terms of double word though, and you've
got the backing of government, so that's one thing. Also that they are going to help you with that compute which is very important and very costly for startup businesses. How quickly are you managing to grow though? I mean, inference basically allows companies to use AI to make AI work for them, and that is massively important for growth in brit How fast you're scaling up, What are your customers actually saying about whether they are doing good things with AI exactly?
I think, as you say, the government doesn't have a huge amount of money to throw around, and so they're being very strategic in how they give this money out. Something that I've been particularly impressed with is the choices when they're deciding which startups to back. It's VC professionals and investment professionals that are choosing those companies, and not necessarily like government civil servants, and so they are very
selectively picking a couple of strategically important winners. US. For example, we are a dedicated inference lab. The problem of tokens and token costs is going to be a huge issue in the UK, especially given how expensive are energy bills are, and so they've picked just a couple of companies that they think can really play in this space. It's not like they're picking, you know, every AI application level company, because actually there's also plenty of VC funding to go
around as well. We are predominantly VC backed and we aren't taking money from the government. Just kind of compute where they can be strategically important.
I mean, you've raised as far as I can make out a little over twenty six million dollars when you're backed by Dawn Capital, by Oxford's venture Atomic and so that idea though, staying in Britain, building in Britain, staying in Britain. Yes, Now what happens later as the business grows? Would you be committed to staying in the UK.
Yeah. The common pattern that we see is that Britain is great at starting businesses. We have great pedigree, so we are kind of Oxford, UCL cac L scientists and we start in Britain. The issue is is that Britain doesn't necessarily have our customers. A lot of our customers are abroad and are in the US, and so what we often see is company starting here but then moving abroad and then scaling abroad. And that's specifically the challenge
that this government is trying to stop. We think, and we've committed to building our R and D tech cubs in the UK and in London because we think there's fantastic talent to benefit here and I would like to think of the UK as more than just an R and D hub, but also as a place where we can have great customer relationships, firstly with the government but also with businesses as well.
For our markets audience Burrium. I'd love to just point out a figure that was in the TechNation report this week. Thirty percent of UK tech leaders say that AI is a bubble. If you're in this bubble, if it is one, what's your view on that, is it going to burst?
Well, if it is a bubble, then it's an incredibly productive one. It doesn't look like the bubbles that we we saw in the two thousands. This bubble kind of is a bubble of valuations potentially, but actually it seems like this is largely being backed up by revenues by
all of these big players. We're seeing record breaking and revenue growth from the likes of Anthropic Open AI in video and others as well, and so obviously there will always be some winners and some losers, as there are adventure but actually this is being backed up by real revenue for these businesses.
It's not really delivering productivity growth in the UK. But then maybe that's also because we're right at the beginning of this. I suppose again, what are you offering your customers because part of the package is you know, you're talking about global customers and customers in the US, but part of this idea is allowing sovereignty in AI, allowing a kind of ring fenced AI for businesses that they're
not so reliant on global US best based businesses. How do you balance that the idea of delivering sovereign AI.
So the biggest problem in AI at the moment is the problem of inference and the problem of tokenomics. And so that is the problem of like, how do you actually run these models and how do you actually run them in a way that is semi affordable. So at double World, we've been thinking about token costs for a very very long time. But only a couple of weeks ago, Uber announced that it had blown through its entire AI budget or by April, so in four months, it had
blown through twelve months of budget. Because that is just how expensive AI has turned out to be to adopt for some businesses. And that's the problem we're trying to solve, is how can we allow businesses to adopt AI at scale, but also do so in a way that's affordable and in a way that they can control.
Well, it's interesting that Anthropic's got the token model. I wonder if you have thought strong opinions on Anthropic versus Open AI, because of course the IPOs are coming at the same time.
Roughly yeah, and they're both incredibly impressive businesses. And only yesterday we saw Anthropic release a new model which was a version of that much reported Mythos model that everyone's been talking about. It seems in terms of capability there's really not much between them. I would say at the moment, there's probably slightly wider adoption amongst businesses for Anthropic, but open AI seems to have much more consumerttraction, and so
they're really really neck and neck. But also I do believe that there's space for both, and I think it's very healthy that we have both in healthy competition there. But also we are very strong believers in open source models as well, and so we actually think open source models are going to play a bigger role in the AI landscape than some people currently believe.
How in terms of the UK, how close the EU has a different kind of regulatory structure. How close is the UK to the EU? I mean you say that there's plenty of VC money in the UK, How are you thinking about Europe in the contest of the US compared to the US. I suppose now about that again, that kind of sovereignty idea of the UK and Europe.
So I think London and the UK really stands apart in terms of the amount of VC investment we have. So in Q one we had record amounts of VC investment in AI startups. I think it was five point eight billion dollars, and so we are kind of out competing our European neighbors, although there are very strong AI companies in Europe as well, namely like Mistral and Lovable for example. But when we think about sovereignty in this country, I don't necessarily think about it in terms of as
a competition between any other country. I think about it as what do we need to make sure that we can keep the lights on when things if things go pair shaped? And what that means is we need, you know, lower energy costs in this country, We need more data centers in this country, and we need you know, inferant software and you know, great model companies as well, so that we can run that AI you know in this country. If the worst were to.
Happen, well, yeah, the Bank of thing the Governor Andrew Baileys want the AI main I need to be rationed because of the energy capacity constraints. And you know governments facing these choices between deploying AI and healthcare versus defense versus other sectors. How far off are we from those sorts of decisions.
It's an incredibly good question. And at the moment some companies are having to ration their usage because of how expensive they are finding it, and it is particularly a problem in the UK because of our energy costs. One of the projects that we've been doing on is and
barred the UK supercomputer is at dou World. We've been doing a lot of research in how can we make this supercomputer more efficient for producing tokens such that we can make the most of the limited kind of energy and limited money that we have, so we can get the most out of it so we don't have to ration. Otherwise, if we don't look at efficient inference, then we will have to ration this AI and that is not going to be good for anyone.