Locai shifts AI inference off the cloud and onto the user’s own device, turning variable cloud API costs a growing margin liability into predictable fixed costs
As part of the Google for Startups Accelerator initial cohort, Locai gained exclusive insight into the ultra-high efficiency models Google has been developing for consumer hardware to help drive its infrastructure design
The funding will scale go-to-market efforts to onboard SaaS and desktop AI product companies struggling with costly per-user interaction billing from cloud providers
London, UK, 22 April 2026 - Deep-tech start-up Locai has successfully raised £1 million in pre-seed funding, led by Fuel Ventures. Developing off-cloud AI infrastructure, Locai directly addresses a critical issue threatening AI scalability: the escalating costs and privacy concerns driven by cloud-based inference. 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, a part of the Google for Startups Accelerator 2025’s initial cohort, effectively utilised the program to refine its vision and achieve scale. By leveraging its unique access to Google’s technology and expertise in high-efficiency AI, Locai has been able to effectively position itself to build for the AI architectures of the future, not just what is popular now. The company is now tackling the challenges of scaling on the edge by blending the speed of off-cloud inference with the scale of cloud-based infrastructure. It directly moves AI processing from the cloud onto the user’s device - whether a laptop, workstation or dedicated hardware. This enables faster performance, improved privacy and greater reliability, even offline, while allowing companies to replace unpredictable cloud API costs with fixed infrastructure spend.
This shift is being driven by a convergence of structural market pressures, specifically the UK’s growing demand for sovereign AI governance and control over national infrastructure that currently lacks oversight and the necessary guardrails. Also, due to a growing cost challenge, AI is no longer a feature but the product itself - embedded in meeting tools, writing platforms and code assistants, meaning inference is triggered on every user interaction. As a result, per-user cloud billing is increasingly unsustainable, placing significant pressure on margins as companies scale. At the same time, advances in hardware mean modern laptops and workstations can now run capable 7–13B parameter models locally, with performance sufficient for the core tasks underpinning most enterprise and SaaS applications.
Crucially, the era of mandatory cloud data migration is coming to an end. Data and AI sovereignty is now non-negotiable, with privacy and control concerns becoming a critical liability as companies and government are forced to send highly sensitive data, from meeting transcripts to customer conversations, through third-party cloud APIs. Locai removes this risk entirely with its scalable on-device inference architecture and tools; users have full-control of where their AI operates, and their data is stored.
Locai was founded by AI experts Joseph Ward and Saif Al-Ibadi, who previously built a deep-tech company focused on generative design technologies for defence and aerospace engineering. Their work included designing and testing the UK Ministry of Defence’s first generatively designed rocket engine, reducing design times by over 90%. Their experience spans applying artificial intelligence to complex engineering challenges since 2018 and building AI systems for highly resource-constrained environments.
This expertise underpins Locai’s approach. Having delivered production AI in high-stakes settings, the founders recognise the risks of cloud dependency for mission-critical systems. The need for this infrastructure has already been proven through a multi-year contract with B2Space, deploying AI agents at the edge of space and cutting bandwidth costs by over 90%.
The pre-seed funding will be used to scale go-to-market efforts, targeting SaaS and desktop AI companies - including those 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.
Joseph Ward, Co-founder of 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. “
Mark Pearson, Founder of 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.”
ENDS
Notes to Editors:
For further information, please contact press@locai.co.uk or visit our website.
About Locai
Locai is a deep-tech AI company providing sovereign, off-cloud AI infrastructure. Its solution shifts AI inference off the cloud and onto the end user’s own device, eliminating variable cloud API costs and enhancing privacy and reliability. Founded by Joe and Saif, the company leverages their experience building production AI systems for high-stakes, infrastructure-constrained environments, including aerospace and spacecraft. The primary goal is to serve SaaS companies struggling with runaway inference costs.
About Fuel Ventures
Fuel Ventures is a leading UK venture capital fund specialising in early-stage, high-growth technology startup investments with disruptive founders aiming to build global businesses. Founded in 2014 by entrepreneurs for entrepreneurs, Fuel provides expertise in business development and scaling. It has invested over £246 million into more than 210 UK companies, including early investments in Volt (£256m valuation), ContentCal (acquired by Adobe for £110m), and Capdesk (acquired by Carta for $88m).