Doubleword CEO Meryem Arik Talks Scaling and AI Investment

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Caroline Hepker** (0:07)
Now let's get into a big conversation this morning. We are in the midst of London Tech Week. Lizzy, you're also out and about at Founders Forum. British AI business, Doubleword, the UK's first dedicated inference lab is one of the first companies that has been backed by the UK government's Venture Fund for domestic AI startups. We've spoken to the AI Minister about this. And I'm really delighted that we have Meryem Arik, who is the co-founder and CEO of Doubleword in the radio studio with us. Welcome to Bloomberg Radio.

**Meryem Arik** (0:38)
Thank you for having me.

**Caroline Hepker** (0:39)
Yeah, Meryem, I know that you've been right at the heart of this government activity with London Tech Week. You've been to Downing Street already. How do you think about the government's announcements in terms of helping businesses like yours?

**Meryem Arik** (0:53)
So the government is taking a very different approach for how UK governments have typically treated the tech sector. So typically, UK governments have had a very hands-off approach.
And unfortunately, most of our competitive countries don't have a hands-off approach. And almost every single generational business that has ever been built has had a very hands-on interventionist approach from their governments. And so for the first time, what we're seeing from this government is wanting to back the strategically important AI companies of the future, and really back them so that they not just start here, which plenty of companies do, but also stay here and scale here so we can really build generational companies in the UK as well.

**Lizzy Burden** (1:34)
But are you taking what the Stammer administration is saying seriously when there's so much speculation about who's going to be the Prime Minister? And for example, Andy Burnham, the Greater Manchester Mayor, is talking about more regulation on tech.

**Meryem Arik** (1:47)
Yes, I think the tech sector gets painted with a very broad brush. I think it's like the Kier Stammer administration as well, also wants a lot of regulation on big tech and social media. But I think that's very different to the very innovative startup companies and scale up companies that are kind of British at its core and they want to keep British. And they're really putting kind of their money where their mouth is.
And we are part of a $500 million sovereign AI fund. We have received a compute allocation from them. They've also recently announced two days ago, a 1.1 million pound fund to procure compute so we can build more supercomputers in this country. And so it does seem like they're taking this very, very seriously, although something I'm worried about is a change in government will lead to a change in the ministers in the Department of Science and Technology that we think have been doing a very good job.

**Caroline Hepker** (2:40)
OK, some praise then for those ministers.
I mean, the issue, though, with picking the winners and losers in the UK is simply that Britain isn't spending very much money. I mean, if you look at the trillions of dollars being used for the infrastructure build out in the US, it pales into insignificance. But I understand that it's sort of trying to pick the winners. In terms of Doubleword, though, and you've got the backing of government, so that's one thing. Also, that they are going to help you with that compute, which is very important and very costly for startup businesses. How quickly are you managing to grow, though? I mean, inference basically allows companies to use AI, to make AI work for them, and that is massively important for growth in Britain. How fast are you scaling up? What are your customers actually saying about whether they are doing good things with AI?

**Meryem Arik** (3:32)
Exactly. I think, as you say, the government doesn't have a huge amount of money to throw around, and so they're being very strategic in how they give this money out. Something that I've been particularly impressed with is the choices. When they're deciding which startups to back, it's VC professionals and investment professionals that are choosing those companies and not necessarily government civil servants. And so they are very selectively picking a couple of strategically important winners.
Us, for example, we are a dedicated inference lab. The problem of tokens and token costs is going to be a huge issue in the UK, especially given how expensive our energy bills are.
And so they've picked just a couple of companies that they think can really play in this space. It's not like they're picking every AI application level company, because actually there's also plenty of VC funding to go around as well. We are predominantly VC backed and we aren't taking money from the government just to kind of compute where they can be strategically important.