Booz Allen makes strategic investment in Latent AI

By Marjorie Censer / July 13, 2021 at 9:48 AM

Booz Allen Hamilton said Monday it has invested in artificial intelligence and machine learning company Latent AI, marking the contractor's first tech scouting investment.

Booz Allen in 2015 established a dual-use tech scouting group in San Francisco. Brian MacCarthy, who founded the group, told Inside Defense the idea behind the organization was that the company needed “to find a better way to team with the private sector, particularly in the software space.”

“We found a capability here that we thought was a differentiator,” he said. “This is our first minority investment that we’ve done out of the dual-use tech scouting group.”

Booz Allen is not disclosing the size of its investment. Latent AI was founded in 2018 as an early-stage venture spinout of SRI International, Booz Allen said. It is funded by Future Ventures, Autotech Ventures and others.

Steve Escaravage, who leads Booz Allen’s analytics practice and artificial intelligence services business, told Inside Defense the company has considered hundreds of tech companies with relevant ideas.

However, he said one of the challenges was finding a company that could operate in more difficult conditions.

“We’d see the capability demonstrated, but then it really was designed and could only be executed in this pristine laboratory-based environment,” Escaravage said. “That is not where the problem was manifesting for our clients.”

He said Booz Allen sees multiple ways to work with Latent AI, from helping with Booz Allen’s current portfolio of work to considering new problems where they might be able to partner.

MacCarthy said the deal “isn’t necessarily a financial investment for us; it’s a strategic investment.”

Escaravage noted investments like this are intended to help Booz Allen move quickly to stay ahead on AI.

“The fastest way to be able to accelerate the adoption of AI . . . around some of these really complex, nuanced areas is to find the best companies out there who are solving this problem,” he said.