London-based AI developer Locai Labs and cloud infrastructure provider Civo have signed a memorandum of understanding (MoU) to develop the UK’s “first” sovereign large language models.
The MoU marks the creation of Project Mercury, through which the two UK firms will endeavour to “reclaim British digital autonomy,” building pre-trained LLMs and cloud infrastructure intended to comply with national regulatory and security requirements from the ground up.
In its press release, Locai Labs says that its partnership with Civo will ultimately enable the UK to reduce its reliance on foreign-owned AI developers and hyperscalers, which may be “subject to control from their host nation governments.”
The two firms plan to provide a local alternative to such entities, with the use of Civo’s data centres ensuring that user data remains within UK borders. This feeds into a growing trend in Europe towards locally sited tech infrastructure, with global sovereign IaaS cloud spending forecast to reach £60.6bn this year, and to grow in Europe alone by 83%.
A ‘trusted, homegrown’ range of sovereign LLMs
As part of Project Mercury, Locai Labs will develop the Mercury Series of LLMs, a range of multi-purpose models that will be hosted on the Civo Sovereign Cloud or on an enterprise’s own on-site infrastructure.
Locai is aiming for its models to be general purpose, with application in the “the secure digitisation of public sector services” and for “private sector enterprises in finance, healthcare, and engineering.”
Locai will build and train its LLMs entirely in the UK, with the series set to include efficient models of up to 30 billion parameters, which the company expects will have edge computing applications for companies requiring low latency.
The series will also produce larger models of around 256 billion parameters, which would broadly compare to Meta’s Llama 4 Behemoth, for example, although estimates indicate that more advanced frontier AI models such as Anthropic’s Claude Mythos and OpenAI’s ChatGPT 5 would outperform it.
Providing a statement on Project Mercury’s announcement, Locai Labs’ CEO and co-founder James Drayson said that it marked a “pivotal moment” for UK artificial intelligence.
“By combining our advanced Mercury model development with Civo’s UK sovereign cloud infrastructure, we’re creating a trusted, homegrown AI ecosystem that meets the highest standards of security, sustainability, and performance,” he said.
Locai’s message to the UK Government: ‘forget-me-not’
The partnership’s emergence comes at arguably a key moment for the UK, given that OpenAI pulled out of a prior commitment last week to build an AI data centre in the northeast of England.
OpenAI’s data centre would have formed part of a £31 billion investment in the UK’s AI and digital infrastructure, featuring contributions from Microsoft, Nvidia, and Google.
In its press release, Locai Labs mentions the UK Government’s Sovereign AI Fund, which is set to begin distributing a total of £500 million in funding to British AI companies starting from April.
There is no indication or confirmation that Locai Labs will be receiving any of this funding, although given that OpenAI cited UK energy costs as one of the reasons why it was pausing its data centre plans, governmental support may end up proving key for its partnership with Civo.
It may face competition for any funding from UK-based firm Stability AI, which is best known for its text-to-image model Stable Diffusion, while other notable European AI firms include Mistral AI (France), Aleph Alpha (Germany) and DeepL (Germany).
Locai Labs launched it and the UK’s first foundational LLM, Locai, in November 2025, noting that its model includes a novel ‘forget-me-not’ architecture that enables it to combine earlier and new training data, ensuring that prior knowledge is not forgotten.
London-based AI developer Locai Labs and cloud infrastructure provider Civo have signed a memorandum of understanding (MoU) to develop the UK’s “first” sovereign large language models.
The MoU marks the creation of Project Mercury, through which the two UK firms will endeavour to “reclaim British digital autonomy,” building pre-trained LLMs and cloud infrastructure intended to comply with national regulatory and security requirements from the ground up.
In its press release, Locai Labs says that its partnership with Civo will ultimately enable the UK to reduce its reliance on foreign-owned AI developers and hyperscalers, which may be “subject to control from their host nation governments.”
