It is 2023, and where there is an AI, there is a company looking to profit from it, and a regulator looking to police it. In short, the above meme.
One startup — Belfast’s Enzai — has just raised $4m in funding to help companies building or using AI products navigate this reality. The investment was led by Cavalry Ventures, with participation from Seedcamp and existing backers Techstart Ventures.
What does Enzai do?
Enzai — founded in 2021 — helps its customers comply with rules and regulations. It’s a web-based SaaS platform that allows clients to identify which parts of their business functions are subject to AI-related rules, and then assesses what the company needs to do to comply with them. It then monitors that compliance.
And while new legislation like the EU’s AI Act have grabbed headlines in recent months, cofounder Ryan Donnelly says that many businesses working with AI are subject to a patchwork landscape of rules, some of which have been in place for years.
“Banks in the US, for example, have been regulated with their use of [AI] models for a long time. The [Federal Reserve] issued guidance in 2011,” he tells Sifted. “There are very specific requirements for the financial services industry and you're seeing similar things in healthcare and insurance.”
Donnelly says that most of Enzai’s clients come from these kinds of “inherently” risky areas of business, also including cybersecurity, HR and governmental services providers.
Governance is good
Donnelly says he’s a big believer in the positive potential of AI for business and society, but that currently the technology is hampered by a lack of trust in wider society, as generative tools are increasingly being used in scams and the production of misinformation.
“Any kind of potentially dangerous technology has a breakthrough moment and then later we try to put in rules around it to make sure it’s used in the right way,” he says. “Cars were invented and we didn't really know what seatbelts were. People were getting chucked out of their cars through the front window, and there was a lot of collateral damage before people figured, ‘Hey, seatbelts might be a good idea.'”
One area of regulation where Donnelly says he thinks we’ll see significant regulatory change is around the issue of training generative models like ChatGPT on huge amounts of copyrighted material.
“I think there has been a case of people laying their hands on everything and taking it and asking for permission later,” he says. “I think you will see there will have to be ways to compensate the original creators for some of this copyrighted material for the work that's gone into these models.”
What’s next for Enzai?
Enzai says it’ll use the new funding to grow its team of six people to 15 by the end of the year, beefing up its business development and customer success teams, after a lot of initial focus on product development.
The company is far from the only one providing AI governance solutions to other businesses. Big beasts like IBM offer their own solutions, while there are other startups like Credo AI, Holistic AI and Ketch popping up.
Enzai believes that its team’s mix of legal and AI expertise, along with a platform that works flexibly across different types of business, will allow it to stand out from the pack.
And with the explosion of companies deploying AI around the world, as regulation of the technology only gets more complicated, even a small piece of the pie could be pretty big.
