Stanhope AI, a London-based deep tech artificial intelligence company, has raised $8 million in seed funding to advance development of its brain-inspired “Real World Model,” designed to operate in dynamic physical environments beyond the limitations of large language models. The round was led by Frontline Ventures, with participation from Paladin Capital Group and Auxxo Female Catalyst Fund, alongside follow-on investment from UCL Technology Fund and MMC Ventures.
Founded in 2023, Stanhope AI is developing a next-generation framework for adaptive intelligence that moves AI systems beyond language processing into real-world perception and action. The company’s Real World Model is grounded in neuroscience research and seeks to enable machines to operate reliably in unpredictable, physical environments.
The company was co-founded by Professor Rosalyn Moran and Professor Karl Friston of University College London’s Institute of Neurology. Drawing on Friston’s Free Energy Principle, the company applies a brain-inspired paradigm known as Active Inference. This approach focuses on enabling intelligent systems to minimize uncertainty through continuous perception and action, rather than relying on static datasets.
Stanhope AI says its technology is already being tested in autonomous drone and robotics applications with international partners, with the aim of enabling machines to adapt more effectively in real-world scenarios where conditions can change rapidly.
The funding comes as the industry shifts from cloud-based AI toward edge and on-device systems. At CES 2026, NVIDIA CEO Jensen Huang described a turning point for physical AI, signaling growing momentum for systems that can operate independently of centralized data centers. Stanhope AI’s models are designed to run efficiently on-device, using limited data and energy, making them suitable for autonomous systems, defense technology, industrial automation, and embedded devices where reliability is critical.
With the new capital, Stanhope AI plans to scale partnerships and expand field trials across multiple sectors in 2026, particularly in areas such as defense and aerospace, where performance under uncertain conditions is essential.
KEY QUOTES
“We’re moving from language-based AI to intelligence that possesses the ability to act to understand its world – a system with a fundamental agency. Our approach doesn’t just process words, it understands context, uncertainty, and physical reality.”
Professor Rosalyn Moran, CEO And Co-Founder, Stanhope AI
“The future of physical AI demands systems that can truly adapt in real-time. The team at Stanhope AI are bringing a unique scientific approach to deliver exactly that, and are already proving themselves in high-stakes, real-world applications. Their pace of execution, from academic research papers to a system that works safely at the edge, is both rare and deeply significant.”
Zoe Chambers, Partner, Frontline Ventures
“We are excited to support Stanhope AI as they redefine the boundaries of machine intelligence. Their technology showcases the next evolution of AI – intelligent systems that can operate with autonomy, efficiency, and resilience across real-world domains. This aligns strongly with our mission to back innovations that strengthen and secure critical technologies globally.”
Christopher Steed, Chief Investment Officer And Managing Director, Paladin Capital Group
