Newcastle-based Startup Set to Revolutionize AI with Logic-Based Alternatives to Neural Networks

Newcastle, UK – June 3, 2025 — UK-based AI startup Literal Labs has raised €5.4 million to speed up work on its logic-based AI models. These models are designed to be faster, use less energy, and be easier to understand than current AI. The money will also help grow the team and launch the company’s first product later in 2025.

A Shift Toward Smarter AI

Founded in 2023 as a spinout from Newcastle University, Literal Labs is leveraging a new approach to artificial intelligence—using propositional logic instead of neural networks—to build custom AI models for high-performance, low-energy applications.

CEO Noel Hurley, formerly of Arm, emphasized the need for sustainable and explainable alternatives as AI adoption continues to surge:

“Our logic-based AI offers a new solution for those that want and need high-performing AI that is faster, more energy-efficient, and more explainable than what’s currently available via neural networks.”

Strong Investor Backing

Literal Labs raised €5.4 million in funding, led by Northern Gritstone and co-led by Mercuri, with support from Sure Valley Ventures, Cambridge Future Tech SPV, and several angel investors. The company doubled its team size in 2024 and recently named Leon Fedden, who was previously the AI lead at AstraZeneca, as its Chief Technology Officer.

Duncan Johnson, CEO of Northern Gritstone, said:

“Literal Labs is our first investment linked to Newcastle University. Their logic-based AI models could be a game-changer in how we scale intelligent technologies.”

What Sets Literal Labs Apart?

Literal Labs’ AI models use the Tsetlin machine, a logic-based method created by mathematician Mikhail Tsetlin. Instead of deep learning, they follow simple logic rules, which makes them much faster and use less energy. The company says their models are up to 54 times faster, 52 times more energy-efficient than regular AI, and 250 times quicker than tools like XGBoost.

This makes them ideal for low-power devices, battery-run products, and industries that need easy-to-understand AI decisions.

Commercial Product Launch Expected in Late 2025

With a rapidly growing team and significant investor backing, Literal Labs is aiming to launch its first commercial product by the end of the year. The solution is expected to cater to clients in sectors ranging from health tech to embedded systems and industrial automation.

Esha Vatsa, Partner at Mercuri, added:

“We are excited to back Literal Labs as it redefines AI with a radically efficient alternative to existing neural networks.”