TORONTO, Feb. 15, 2024 - Armilla AI, the assurance platform providing trust in AI through product verification and warranties, today announces $4.5M in Seed funding to scale risk assurance products for AI and de-risk AI adoption for enterprises. The round was led by Mistral Venture Partners with participation from MS&AD Ventures, SixThirty Ventures, Morgan Creek Digital and Y Combinator and insurance providers Greenlight Re and Chaucer. The funding will enable the expansion of Armilla Guaranteed™, a quality assessment and performance guarantee for AI products.
Just as the internet’s rise prompted a focus on cybersecurity, the rapid growth of AI has raised concerns for enterprises. A survey of 2,800 directors to C-suite level executives conducted by Deloitte’s AI Institute found that 3 in 4 leaders believe their organization is unprepared to address the emerging risks that AI presents to their organizations. Governments fear the downsides of AI too, prompting the Biden administration’s Executive Order, which aims to ensure the ethical development and application of AI, and the EU’s commitment to passing the AI Act.
Armilla AI helps enterprises and AI vendors both understand the risks of AI and establish protection for when problems arise. Leveraging requirements in global AI regulations and standards such as the EU AI Act and the NIST AI Risk Management Framework, the Armilla Guaranteed™ platform first conducts assessments to verify the quality of an AI model, searching for threats like racial or gender bias and weak model formation. If that model does not perform as promised, the buyer of the product will be reimbursed for the license fee that they paid. The warranty is backed by world-class insurers Swiss Re, Greenlight Re and Chaucer who are responsible for fulfilling the warranty coverage.
“With so many ways to integrate AI into a business, one of the biggest challenges for enterprises is being confident in what they are procuring from third-party AI vendors. If one of those products breaks down, it’s the enterprise that takes the hit,” said Karthik Ramakrishnan, CEO and co-founder of Armilla AI. “With the introduction of our warranty product, we’re giving enterprises a guarantee that the AI products they choose are compliant, function as advertised, and because AI is susceptible to errors, they are protected when failures do happen. We believe this will fundamentally reshape the understanding of responsible AI, and the backing from our investors will help us explore additional insurance policies that limit risk for Enterprises.”
“AI has huge potential to drive growth and unlock new opportunities for the enterprise, but only if AI is accurate and dependable,” said Tiffine Wang, Partner at MS&AD Ventures. “We jumped at the opportunity to back Armilla because they are not only helping to promote more responsible AI but also providing protection and peace of mind. When it comes to new, ever-evolving technology like AI, that’s invaluable.”
A research report from MIT Sloan Management Review and Boston Consulting Group revealed that 55% of all AI failures come from third-party tools, posing the risk of reputational damage, financial losses, regulatory action and even litigation. Armilla AI’s products will not only help enterprises better understand risk, but also give vendors a third-party stamp of approval to establish more trust in the market and shorten sales cycles. Armilla is already supporting AI vendors within healthcare, financial services and Manufacturing.
“As regulators continually offer more guidance on the use of AI, businesses need to up their game in quality and compliance," said Raif Barbaros, Partner at Mistral Venture Partners. “Armilla AI will help enterprises be prepared to face these regulatory challenges head-on while also minimizing direct risk to their business. The Armilla team knows that ensuring AI is fair and thoughtfully tested is the first step to making it safer for everyone and we’re proud to be a part of the warranty that will help tech leaders breathe easier as this technology evolves.
''Customers and brokers we've spoken to are generally excited about the opportunity to have some form of AI protection. As it stands, given the rapidly evolving AI risk landscape, there is little to offer these customers today”, said Brian O'Reilly, Head of Innovation at Greenlight. “Armilla has a deep technical understanding of AI and the regulatory landscape that surrounds it, allowing them to create a platform that automates a large portion of AI risk evaluation and provide a systematic methodology for evaluating AI risk across a range of model types and use cases.''
The company is expanding its leadership team with the hire of Jerry Gupta. Gupta, formerly a Senior Vice President at Swiss Re where he spearheaded insurance policies for emerging tech products, including cybersecurity, played a pivotal role in shaping the functionality of Armilla’s AI product warranty.
About Armilla AI
Armilla AI is a provider of AI risk mitigation and transfer solutions on a mission to empower enterprises to safely deploy cutting-edge AI. Using industry-leading AI/LLM evaluation technology, the company assesses and quantifies the risk level of AI models to provide AI verification and warranties, backed by leading reinsurers Swiss Re, Greenlight Re and Chaucer. A graduate of renowned AI and insurtech accelerators, including Y-Combinator, Lloyd’s Lab and Betaworks’ AI Camp, Armilla AI was recently named to FinTech Global’s Insurtech100 and InsureTechConnect’s Forward50, and is a winner of the Responsible AI Institute’s 2023 award for most outstanding product.
