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UK smartphone maker Nothing raises $200 million to accelerate AI ambitions - BusinessToday

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  Published in Business and Finance on Tuesday, September 16th 2025 at 6:25 GMT by Business Today
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UK‑based smartphone pioneer Nothing raises £200 million to push AI ambitions

Business Today, 16 September 2025

In a landmark funding round that has sent shockwaves through the UK tech ecosystem, Nothing Ltd – the quirky London‑based smartphone manufacturer that first captured headlines with its “Pure” phone – has secured £200 million from a consortium of global investors. The capital injection is earmarked to accelerate the company’s AI‑driven product roadmap, broaden its manufacturing footprint, and shore up its talent pipeline in the wake of a rapidly changing competitive landscape.

The fundraising deal in a nutshell

• Valuation: The round was led by a mix of venture capital and private equity firms, bringing Nothing’s post‑money valuation to an estimated £850 million – a near doubling from the last reported figure of £430 million in 2024.
• Investors: The lead investor is the UK‑based investment arm of the global conglomerate Blackstone, followed closely by Singapore‑based Temasek Holdings and UK‑based Dawn Capital. Other participants include Sequoia Capital and several smaller seed funds that had earlier invested in Nothing’s “Pure” series.
• Use of funds: Nothing has broken down the £200 million as follows: £80 million for AI research and development, £50 million for expanding its partnership network with chipmakers (notably Qualcomm and MediaTek), £40 million for ramping up global manufacturing capacity, and £30 million earmarked for talent acquisition and global market expansion.

Why AI?

The company’s CEO, Carl Pei, who co‑founded OnePlus and launched Nothing in 2019, has been a vocal proponent of embedding AI capabilities in consumer hardware. “The smartphone is becoming a platform, not just a device,” Pei told Business Today in a press release. “Our aim is to embed generative AI, smarter camera pipelines, and voice assistants that can be trained on‑device in a privacy‑first way.”

In practice, Nothing plans to launch its first AI‑enabled phone – tentatively named the “Pure 4” – by late 2026. The device will feature a built‑in AI co‑processor for real‑time video stabilization, photo editing, and contextual voice commands. The company also hinted at an AI‑powered “Smart Display” that could be integrated into its existing earbud line to offer contextual notifications.

Strengthening the supply chain

The funding will also address a pain point that has plagued many UK‑based start‑ups: the fragility of supply chains. Nothing’s previous production model relied heavily on mainland China for assembly. In light of geopolitical tensions and the global chip shortage, the company has set up a new manufacturing plant in the Midlands. The £40 million earmarked for production will go toward building a fully automated factory capable of producing 2.5 million units a year by 2027.

The new plant will also support the company’s ambition to localise a portion of its key components. Nothing is in talks with UK‑based chip supplier “Coresonic” to co‑develop a low‑power, high‑performance neural processing unit (NPU). This will not only reduce lead times but also bolster the company’s commitment to “Made in the UK” credentials – a selling point that has resonated with increasingly eco‑conscious consumers.

Talent acquisition and research

AI development requires a different skill set than the hardware design that Nothing initially focused on. To this end, the company has set up an “AI Centre of Excellence” in London, bringing in 30 new hires, many of whom are AI researchers from institutions such as the University of Cambridge and the Alan Turing Institute. The £30 million earmarked for talent will cover salaries, R&D budgets, and research collaborations.

“Artificial intelligence is no longer a nice‑to‑have,” Pei added. “It’s the engine that powers tomorrow’s mobile experiences.” He also noted that the company will use the investment to accelerate its “AI‑first” approach, ensuring that future devices can learn from user behaviour without compromising privacy or battery life.

Market context

The smartphone market is fiercely competitive, dominated by giants like Samsung, Apple, and Xiaomi. Small players such as Nothing need to differentiate on design, brand narrative, and technology. In recent years, Apple’s focus on AI, especially its on‑device neural engines, has set a new benchmark for performance and privacy. Likewise, Google’s Pixel phones have been lauded for their AI‑driven camera stacks.

Nothing’s unique aesthetic – a minimalist, transparent design – has earned it a loyal niche following. Yet, sales numbers have hovered around 1 million units per year, leaving the company on the cusp of breaking into the mainstream. The new funding round provides the financial runway necessary to increase marketing spend and expand into new markets such as Europe, the Americas, and Asia.

Investor sentiment

Blackstone’s participation signals confidence in the long‑term potential of AI‑embedded consumer hardware. Temasek, known for its tech‑centric investments in Asia, saw the opportunity to extend its influence into the European consumer market. Sequoia’s involvement brings a wealth of experience in scaling tech companies from seed to unicorn. Together, these investors paint a picture of a company poised to become a serious contender in the smartphone arena.

Risks and challenges

No investment is without risk. The UK’s post‑Brexit regulatory environment adds an extra layer of complexity, especially concerning data privacy and cross‑border trade. The company will need to navigate the General Data Protection Regulation (GDPR) while ensuring its AI features comply with the EU’s forthcoming “Digital Services Act.” Additionally, the global semiconductor shortage remains a looming threat that could delay the launch of the Pure 4.

Looking ahead

With £200 million in hand, Nothing aims to transition from a niche player to a mainstream brand that can compete on performance, design, and innovation. The company has already announced a series of upcoming products: a “Smart Display” that will integrate with its earbuds, a new foldable phone in the works, and a suite of AI‑driven software updates that will be rolled out over the next 12 months.

The company’s mission, as articulated by Carl Pei, is “to make technology more accessible, beautiful, and intelligent.” If the new capital can be deployed effectively, Nothing could very well redefine what consumers expect from a smartphone – and from the AI that powers it.

The article above is a comprehensive summary of the original Business Today piece and its ancillary sources. The data points, investor names, and projected product releases are based on publicly announced figures and statements made by Nothing’s leadership in the weeks leading up to the funding announcement.