Isomorphic Labs has become the latest recipient of investment from the UK government’s Sovereign AI Fund, as ministers step up efforts to support domestic artificial intelligence companies with global ambitions.

The investment forms part of a broader fundraising announced by the London-based company, which is using AI to accelerate the discovery and development of new medicines. Founded by Demis Hassabis, the business is seeking to apply advanced machine learning models to some of the most complex challenges in pharmaceutical research.

The backing represents the third equity investment made by the Sovereign AI Fund since its launch last month. The initiative is intended to support early-stage AI companies deemed strategically important to the UK economy, combining venture capital funding with broader government support, including access to computing infrastructure.

Ministers have positioned the programme as part of a wider push to strengthen Britain’s position in artificial intelligence amid intensifying international competition.

Science and Technology Secretary Liz Kendall said Isomorphic Labs’ work had the potential to transform drug development by shortening research timelines and improving treatment discovery. “This is AI at its very best,” she said, describing the company as part of Britain’s long tradition of scientific innovation.

Isomorphic Labs builds on advances made through AlphaFold, the protein-structure prediction system developed at DeepMind, which reshaped biological research by dramatically improving scientists’ ability to model proteins. The company is now developing a broader suite of proprietary AI systems intended to support drug design across multiple therapeutic areas.

Joséphine Kant, head of ventures at Sovereign AI, described Isomorphic as “one of the most consequential companies being built anywhere in the world today”.

The investment reflects a broader policy objective to ensure that high-growth AI companies are developed and scaled within the UK rather than relocating overseas. The government argues that strengthening domestic AI capability will be central to future economic growth, employment and technological competitiveness.

The UK already hosts one of the world’s largest AI sectors and the biggest concentration of AI start-ups in Europe. Ministers say the challenge now is to convert that position into long-term industrial and scientific leadership.