HiddenLayer, an AI security startup, has raised $100 million in a Series B funding round led by Delta-v Capital, with participation from Ten Eleven Ventures, Morgan Stanley, Microsoft’s M12, and Booz Allen Hamilton. The company’s tools defend AI models, agents, and workflows from adversarial attacks, vulnerabilities, and malicious code injections. HiddenLayer has seen its annual recurring revenue surge more than tenfold over the past year, now reaching tens of millions of dollars, primarily fueled by new customer acquisitions across sectors such as financial services, large tech firms, and U.S. defense and intelligence agencies.

The startup's growth reflects a rapid expansion in demand for AI security solutions as enterprises accelerate AI deployments and confront emerging risks. Gartner forecasts that companies will spend nearly $2.83 billion this year securing AI tools, an 83% increase from 2025, with spending expected to reach $4.78 billion in 2027. HiddenLayer’s CEO Chris Sestito explained that while AI inference remains consistent, the company has broadened its product scope to cover prompt injections, agent manipulations, and malicious tool use, building on prior offerings including discovery, runtime protection, attack simulation, and supply chain security.

Runtime security has become a central focus as organizations treat AI threats more like traditional endpoint security issues. HiddenLayer actively analyzes around 50 AI file frameworks to verify the authenticity and integrity of open-source models, addressing challenges such as hidden or altered models designed to mislead users. The newly raised capital will be directed toward enhancing product development, growing sales and distribution efforts, and expanding the company’s presence into Europe and the broader EMEA region.

Despite strong competition from established cybersecurity giants and other startups investing heavily in AI security, HiddenLayer aims to continue scaling vertically alongside AI technology. The company anticipates that some security features might eventually be integrated within larger AI platforms from Microsoft, OpenAI, and AWS, but expects AI governance—including discovery, identity, and policy controls—will remain a separate domain. For now, HiddenLayer is focused on leveraging its early momentum to establish a lasting foothold in this rapidly evolving market.