A new, two-phase Innovate UK competition is offering substantial funding for organisations working on state-of-the-art AI and Machine Learning (ML) technologies in the UK.
Phase 1 of Frontier AI Discovery closes on 10 June and is offering up to £35,000 to UK SMEs to conduct feasibility studies. Phase 2 is significantly more generous, supporting projects with up to £10 million in eligible costs. Phase 2 is only open to organisations that successfully applied to phase 1.
The programme targets frontier AI and foundation model development across four mission areas:
- Advanced Materials with AI
- AI-Enabled Health and Life Sciences
- Fundamental AI
- Secure AI for National Security and Defence
Its aim is to build the consortia and technical foundations needed to deliver the next generation of UK-led AI capabilities.
Below, I have explained the key things you need to know about this competition before you apply: who is eligible, how much funding is available across both phases, and what the application process looks like.
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Who is Eligible?
Your Organisation
To lead a Phase 1 application, you must be a UK-registered:
- Business of any size
- Charity or not-for-profit organisation
- Non-governmental organisation (NGO)
- Public sector organisation
- Research and technology organisation (RTO)
- Research organisation
Businesses can apply as a sole applicant or lead a collaborative project involving multiple organisations. You can involve subcontractors, however they must be based in the UK, and their costs can exceed 30% of your project’s total eligible costs.
Each organisation can only submit one application as lead.
Your Project (Phase 1)
Your Phase 1 project must:
- Have total eligible costs of between £25,000 and £50,000
- Last up to three months
- Start by 1 October 2026
All funded work must be carried out in the UK, and you must intend to exploit the project results from or within the UK.
Your project must also:
- Be a feasibility study to develop novel AI or machine learning (ML) technologies, not a routine integration of existing tools
- Build a consortium and develop both a technical proposal and a business model evaluation for Phase 2
- Fall within one of the four competition themes and address a specific priority within your chosen theme
- Produce a technical report outlining the approach for Phase 2
- Provide a clearly defensible IP position, a quantified serviceable addressable market, and a named baseline with metrics for validation
Innovate UK won’t fund projects that:
- Are primarily literature reviews or requirement gathering without substantive experimental R&D
- Don’t align with the competition theme and specific priority areas
- Don’t provide a quantified serviceable addressable market, clear background IP ownership, or a specific defensibility route
- Don’t result in defensible foreground IP
- Focus primarily on routine integration or deployment of existing AI tools without technical innovation
- Have fully autonomous targeting as their primary purpose
- Propose the development of hardware where AI is only a secondary feature
Phase 2: What You Need to Know
Phase 1 is, in effect, the gateway to Phase 2.
Successful Phase 1 projects will be invited to submit full proposals for collaborative R&D projects under Phase 2.
Phase 2 is not open to any organisation that hasn’t passed Phase 1 through this competition, making your feasibility study application the essential first step.
For Phase 2, your project must:
- End by 31 March 2030
- Have total eligible costs of between £5 million and £10 million
- Last 24 to 32 months
Phase 2 projects must be delivered by collaborative consortia. Each consortium must include:
- An academic organisation contributing 20% to 30% of project costs
- Large organisations contributing 30% to 40% of project costs
- SME organisations contributing more than 30% of project costs
Funding for Phase 2 is subject to Innovate UK Business Case approvals.
How Much Funding Can I Apply For?
The amount you can claim depends on your organisation’s type and size and the sort of research your project involves.
Individual Phase 1 grants range from £12,500 to £35,000.
Applying as a Company
| Company Size | Micro and Small | Medium | Large |
|---|---|---|---|
| Feasibility Studies | 70% | 60% | 50% |
*A feasibility study is an evaluation of the potential of a project, aimed at supporting decision-making by objectively and rationally assessing its strengths, weaknesses, opportunities and resources required.
Funding Example
If your Phase 1 project has eligible costs of £50,000 and you are a micro or small company, you could receive a grant of £35,000. You will need to fund the remaining £15,000 from other sources, like R&D Tax Relief, investment or loans.
Applying as a Non-Commercial Organisation
If you are a research organisation, RTO, charity, not-for-profit or public sector organisation undertaking non-economic activity, you can claim up to 100% of your eligible project costs. Je-S registered institutions can claim up to 80% of full economic costs (FEC).
Phase 2 Funding
Phase 1 grants are deliberately modest, designed to fund a focused feasibility study rather than a full R&D programme. Phase 2 is where you can benefit from the full scale of this opportunity. A Phase 1 investment of up to £50,000 could unlock a Phase 2 project worth up to £10 million, with significant public grant funding to match.
Funding percentages for Phase 2 haven’t been confirmed yet. We will update this blog when the full funding details are announced.
Who is Eligible?
Applications are submitted through the Innovate UK Innovation Funding Service (IFS) and are split into four sections: Application Questions, Finances, Project Details, and Project Impact.
There are 17 questions in total:
- 7 unscored administrative questions covering topics like animal testing, export licences, international collaboration, permits and licences, themes, and trusted research and innovation
- 10 scored questions covering your IP position and defensibility, technical development and validation, team and resources, market awareness, route to market, wider impacts, project management, risks, added value, and costs and value for money
You can (and we advise that you do) include appendices (PDFs of up to two A4 pages) for the technical development and validation, team, project management, and risks questions.
Each organisation must complete its own project costs and funding details in the Finances section. Academic institutions must submit costs through Je-S.
The Project Impact section is not scored but provides background context on the broader benefits of your project.
If you’re successful, you’ll be notified by 21 July 2026.
Like with most competitions, Innovate UK takes a ‘portfolio approach’ by funding projects across different technologies, markets and technological maturities. This means that a strong score won’t necessarily guarantee that your application will be successful.
How GrantTree Can Help You Secure Frontier AI Funding
GrantTree has over 15 years of experience helping innovative UK businesses secure Innovate UK funding, and has helped clients win more than £500 million in grants — including in highly competitive AI and deep tech competitions like this one.
We offer a range of services to suit where you are in the process, including Full Service Write, Grant Review, Grant Matching, and our bespoke Elevate package, where you can tailor the support to your precise needs.
To find out how we can help, just get in touch.
