AI Security Startups HiddenLayer and Air Raise $150 Million

Two cybersecurity startups secured significant funding this week to address vulnerabilities in enterprise artificial intelligence. HiddenLayer, an Austin-based firm, raised $100 million in a Series B round led by Delta-v Capital, with participation from Microsoft’s M12, Morgan Stanley, Ten Eleven Ventures, and Booz Allen Hamilton. The company protects AI models and workflows from malicious code injections and adversarial attacks. CEO Chris Sestito reported that annual recurring revenue grew more than 10x over the last year to the tens of millions of dollars, supported by clients in government, financial services, and large tech, including the Department of Defense.

Simultaneously, New York-based startup Air emerged from stealth with $50 million in funding led by Sequoia Capital and Greenoaks. Founded by Yair Saban, a former leader in Israeli Military Intelligence's Unit 8200, Air provides a firewall platform that vets websites and add-ons before autonomous agents interact with them. The company uses a four-stage process involving static, dependency, sandbox, and continuous credibility analysis to prevent agents from accessing fraudulent resources.

While HiddenLayer is expanding its sales and distribution into Europe and EMEA, Air is focusing on AI interpretability to reverse-engineer models and ensure they remain unaltered before deployment. These investments align with a broader industry trend, as Gartner estimates enterprise spending on AI security tools will reach $2.83 billion this year.