Swiss Re, Greenlight Re, Chaucer back start up to promote responsible AI
An artificial intelligent start up focused on assurance and risk management has raised $4.5 million in seed funding to scale risk assurance products for AI and de-risk AI adoption for enterprises. The Canadian company has secured backing from a number of investors including leading insurers like Greenlight Re, Chaucer and MS&AD, with Swiss Re providing warranty coverage.
Armilla AI, a provider of AI risk mitigation and transfer solutions, has raised a $4.5 million seed round led by Mistral Venture Partners with participation from insurance providers Greenlight Re and Chaucer as well as MS&AD Ventures, SixThirty Ventures, Morgan Creek Digital and Y Combinator.
Jerry Gupta, former senior vice president at Swiss Re, will join Armilla AI to lead AI assurance product development as the firm looks to expand its platform Armilla Guaranteed. Gupta spearheaded insurance policies for emerging tech products, including cybersecurity, at Swiss Re.
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 company explained.
The warranty is backed by 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.”
Tiffine Wang, partner at MS&AD Ventures, said: “AI has huge potential to drive growth and unlock new opportunities for the enterprise, but only if AI is accurate and dependable. 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.”
Brian O'Reilly, head of innovation at Greenlight, said: “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. 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.”
Armilla AI cited a research report from MIT Sloan Management Review and Boston Consulting Group which 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,” the company stated.
Raif Barbaros, partner at Mistral Venture Partners, said: “As regulators continually offer more guidance on the use of AI, businesses need to up their game in quality and compliance. Armilla AI will help enterprises be prepared to face these regulatory challenges head-on while also minimising 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.”
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