Innovate UK is investing up to £3.1 million to help UK SMEs prove that genuinely new AI and machine learning technology can work, with a clear route to becoming a defensible, scalable business.
Frontier AI: SME Champions is the first stage of a three-phase pipeline designed to build the next generation of UK AI companies. Phase 1 funds short feasibility projects of one to three months. Only Phase 1 winners can apply for Phase 2, which offers up to £1 million for 12-month demonstrator projects. Innovate UK expects roughly a 2% success rate, so the bar is high.
Below, I have explained the key things you need to know about this competition before you apply: who is eligible, how much funding is on the table, and what the application process looks like.
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Who is Eligible?
Your Organisation
To apply, you must be a UK-registered micro, small or medium-sized enterprise (SME). You must apply on your own, as this competition doesn't allow partners or subcontractors.
Each SME can only submit one application. Any further applications from the same organisation will be made ineligible.
Your Project
Your project must:
- Have total eligible costs of between £150k and £250k
- Last between one and three months
- Start by 1 April 2027 and end by 30 June 2027
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:
- Deliver a proof of concept prototype of the whole stack, the core architecture or a critical subsystem
- Deliver a technical white paper, a scaling rationale covering the technology and the business model, and evidence of technical novelty
- Have a clear route to defensibility, like protectable IP, a proprietary data advantage or specialist know-how
- Have AI as the core technical contribution and the main source of operational advantage
- Set out a clear validation method against a named baseline, with numeric targets
- Start at Technology Readiness Level (TRL) 1 to 3
- Target state of the art performance against benchmarks, or a genuinely new to the world capability, driven by innovation in model architecture, training methods, or core learning or control algorithms
Themes
Your project must fall within one of four themes, and focus on one specific priority within it:
- Advanced materials with AI: material prediction and generative models, physics ML for simulation, multimodal knowledge discovery, world models for materials manufacturing, or uncertainty-aware models for characterisation and defect detection
- AI safety and assurance: runtime control of AI agents, dynamic evaluation and safety test environments, formal and runtime verification, or automated adversarial safety testing
- AI-enabled health and life sciences: predictive healthcare, medicines discovery, medicines manufacturing optimisation, or genomics and multi-omics
- Secure AI for national security and defence: advanced AI and autonomous decision systems, or resilient edge intelligence for degraded and contested environments
Innovate UK won't fund projects that:
- Are mainly about hardware, sensors or other infrastructure, where AI is only a secondary feature
- Are mainly literature reviews or requirement gathering, without real experimental R&D
- Develop fully autonomous targeting
- Integrate, deploy or productise existing AI tools or third-party models without developing novel AI
- Lack a quantified serviceable market, clear background IP ownership or a specific route to defensibility
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 grants range from around £90k to £175k.
Applying as a Company
| Project Type | Micro and Small | Medium |
|---|---|---|
| Feasibility Study* | 70% | 60% |
| Industrial Research** | 70% | 60% |
*A feasibility study evaluates the potential of a project, uncovering its strengths, weaknesses, opportunities and threats to support decision-making.
**Industrial research refers to planned research aimed at acquiring new knowledge for developing new products, processes, or services.
Funding Example
If you're a small company with eligible project costs of £250k, you could receive a grant of £175k (70%). You will need to fund the remaining £75k from other sources, like R&D Tax Relief, investment or loans.
Applying as a Non-Commercial Organisation
This competition is only open to SMEs applying on their own. Universities, research organisations, RTOs and charities can't take part, either as partners or as subcontractors.
How Do I Apply?
The deadline for applications is 11 November 2026.
Applications are submitted via Innovate UK's Innovation Funding Service (IFS) portal.
The application is split into four sections:
Project Details
This section gives background to your application and isn't scored, except that your scope answer decides whether your application goes forward to assessment. It covers:
- Application details, like your project title, start date and duration
- Project summary
- Public description
- Research category
- Scope, covering your market, background IP and defensibility, technical novelty, benchmarked validation and the one key uncertainty you'll resolve
Most answers in this section are limited to 400 words, though the scope answer can run to 800.
Application Questions
There are 17 questions in total:
- Seven unscored questions covering your theme, location, animal testing, permits, international collaboration, export licences and Trusted Research
- Ten scored questions covering your IP and defensibility, technical development and validation, team, market, route to market, wider impacts, project management, risks, added value and value for money
You must include appendices for the team (a one-page CV for each person), project management (a Gantt chart) and risks (a risk register) questions. You can also add a two-page architecture diagram and benchmark matrix to the technical question. If you leave out a CV, the team question is capped at five out of ten.
Finances
You'll need to complete your project costs, organisation details and funding details.
Project Impact
This unscored section collects background information on the wider impact of your project.
Your application will be reviewed by three independent assessors. Their individual scores will be combined to determine your final result.
If you're successful, you'll be notified by 26 January 2027.
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.
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