Sovereign AI Fund backs Isomorphic Labs in $2.1bn round, third equity deal

TL;DR:

• The UK Government’s Sovereign AI Fund has co-invested in London-headquartered Isomorphic Labs as part of a $2.1 billion (£1.6bn) funding round announced on 12 May, led by existing backer Thrive Capital with Google Ventures, Alphabet, MGX, Temasek and CapitalG.
• Isomorphic, spun out of Google DeepMind in 2021 and run by Nobel Prize-winner Sir Demis Hassabis, is using AI-driven drug design extending the AlphaFold protein-structure work; first clinical trials are now expected by the end of 2026, slipping from Hassabis’s earlier end-of-2025 target.
• This is the third equity deal for Sovereign AI since launch last month, with nine start-ups in total now receiving fund support including non-equity compute access.

Science and Technology Secretary Liz Kendall described the deal as “AI at its very best — pushing the boundaries of innovation to improve people’s lives”. Joséphine Kant, Sovereign AI’s head of ventures, called Isomorphic “one of the most consequential companies being built anywhere in the world today”.

Cross-source context: the wider round

While DSIT did not disclose the size of the UK stake — typical Sovereign AI equity tickets are £1–10 million, per the fund’s published guidance — Reuters confirms the round was completed at an undisclosed valuation and that Thrive Capital led, with three new backers added: Abu Dhabi sovereign vehicle MGX, Singapore’s Temasek, and Alphabet’s late-stage arm CapitalG. The total raised by Isomorphic since 2024 now stands at $2.7bn (£2.1bn), building from the $600m (£467m) seed round of last year.

Why the UK angle matters

Sovereign AI’s third equity deal lands at a politically sensitive moment. The fund was announced in April as the centrepiece of the government’s UK AI investment strategy, designed to keep promising AI scale-ups headquartered and growing in the UK rather than relocating to the US capital base. Isomorphic ticks all of those boxes — London HQ, UK research footprint, a globally recognised founder — but the company is majority Alphabet-owned, which complicates the “homegrown AI capability” framing Kendall has used. The clinical-trial slip from end-2025 to end-2026 also matters for the fund’s reporting cycle: Sovereign AI will want demonstrable scientific progress from its flagship portfolio company within the current Parliament, not just balance-sheet growth.

Looking forward

Watch two milestones. First, Isomorphic must put an AI-designed drug into human trials by the end of 2026 to validate the technology thesis; missing that twice would invite uncomfortable scrutiny of the £1–10 million ticket size against multi-billion-dollar rounds dominated by US capital. Second, Sovereign AI is now under pressure to announce a deal outside the Google DeepMind orbit — its next equity ticket will be read as the real test of whether the fund is backing diverse UK AI bets or simply tagging along on Alphabet-anchored rounds.