HiddenLayer raises $100 million for AI security tools

In short: HiddenLayer, a startup that helps companies protect their AI systems, raised $100 million in new funding.

What happened

HiddenLayer announced a $100 million Series B funding round. The round was led by Delta-v Capital, with participation from Ten Eleven Ventures, Morgan Stanley, Microsoft’s M12, Booz Allen Hamilton, and others.

The company sells security tools for AI models and AI agents. An AI agent is software that can take actions for you, like pulling data, calling other tools, or completing a task step by step (think of it like a digital assistant that can click buttons and move information around, not just chat).

HiddenLayer’s CEO, Chris Sestito, told TechCrunch that the company’s annual recurring revenue grew more than 10x over the past year. He said it is now in the “tens of millions” of dollars, and that over 90% of the growth came from new customers.

HiddenLayer says it has demand from financial services and large tech companies building AI products. It also has contracts with the US Department of Defense and the intelligence community, according to the report.

The company has expanded its focus to cover newer risks like “prompt injection,” where someone tries to trick an AI system using carefully written instructions (like slipping a bad note into a set of directions). It is also looking more closely at risks in open-source AI models, including cases where a model is not what it claims to be.

Why it matters

As more businesses use AI in real work, mistakes and attacks can have real consequences, like leaking sensitive data or taking harmful actions. Funding for companies like HiddenLayer is a sign that AI security is becoming a standard budget item, similar to how companies pay for antivirus and other protections.

Source: TechCrunch AI