Arize AI, a leading provider of AI observability and LLM evaluation solutions, has secured a $70 million Series C funding round to advance its mission of ensuring AI reliability in production. This landmark investment in AI observability was led by Adams Street Partners, with additional support from M12 (Microsoft’s venture fund), Sinewave Ventures, OMERS Ventures, Datadog, PagerDuty, Industry Ventures, and Archerman Capital. Existing investors Foundation Capital, Battery Ventures, TCV, and Swift Ventures also reaffirmed their commitment to Arize’s vision.
The rapid adoption of AI is driving significant business investment, with enterprise AI spending surpassing $13.8 billion in 2024. In 2025, 68% of enterprises plan to allocate between $50 million and $250 million toward generative AI initiatives. Despite these advancements, large language models (LLMs) still face challenges in maintaining reliability in real-world applications, such as voice assistants. An increasing number of AI models are being trained on synthetic data—information generated by other AI models rather than real-world sources. This raises a critical concern: how can these models effectively evaluate the accuracy of their own synthetic data?
Arize’s OpenEvals research has revealed that LLMs struggle to assess the correctness of synthetic datasets compared to non-synthetic data, exposing a significant gap in AI training methodologies. This issue presents a major risk for enterprises scaling generative AI, as errors in synthetic data can multiply over time, leading to flawed AI systems. For AI engineering teams, LLMs remain a complex challenge—opaque, difficult to troubleshoot, and prone to failures that can disrupt entire projects.
To address these challenges, AI engineers require robust tools to ensure their models operate on solid foundations. Arize’s AI observability and LLM evaluation platform enables teams to test, troubleshoot, and refine AI systems before issues escalate. This is increasingly crucial as organizations deploy semi-autonomous multi-agent systems, voice assistants, and sophisticated consumer-facing AI applications.
“Building AI is easy. Making it work in the real world is the hard part,” said Jason Lopatecki, CEO and Co-Founder of Arize AI. “Enterprises can’t afford to deploy unreliable AI. Engineering teams need better infrastructure to test, evaluate, and troubleshoot their models before they impact customers. That’s exactly what Arize delivers—whether through our enterprise platform, Arize AX, or our open-source offering, Arize Phoenix.”
“As AI research and real-world applications accelerate, Arize will continue to pioneer new tools, like our recent first-to-market launch of audio evaluation for voice assistants, to help engineers working on these systems better evaluate, debug, and improve what they build,” added Aparna Dhinakaran, Chief Product Officer and Co-Founder of Arize.
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Since its inception in 2020, Arize has become a cornerstone of AI observability and evaluation for leading enterprises and government agencies. The company serves top-tier organizations such as Booking.com, Condé Nast, Duolingo, Hyatt, PepsiCo, Priceline, TripAdvisor, Uber, and Wayfair, among many others. Additionally, Arize Phoenix, the company’s open-source AI observability library, has gained widespread adoption with over two million monthly downloads.
Arize’s partnership with Microsoft continues to strengthen, with M12’s investment reinforcing an already robust collaboration. The company has recently expanded its integrations with Azure AI Studio and the Azure AI Foundry portal, SDK, and CLI, streamlining AI observability and evaluation for engineering teams.
“We believe AI observability is the missing piece in making AI truly enterprise-ready,” said Fred Wang, Partner at Adams Street Partners. “As AI adoption accelerates, companies need robust, cohesive tools to ensure their AI systems are performant, reliable, and aligned with business goals. Through our research and diligence in this market, we believe Arize AI has built the category-defining platform for AI observability and evaluation, trusted by leading enterprises and AI-first organizations. We’re excited to support their vision as they scale to meet the growing demand for production-grade AI.”
“Arize AI’s innovative approach to AI observability and LLM evaluation is transforming the way enterprises deploy and manage AI systems. Our investment reflects our confidence in their ability to set new standards in the industry and empower AI engineers and developers to achieve real-world results,” said Todd Graham, Managing Partner at M12.
“Tripadvisor’s billion-plus reviews and contributions are becoming even more important in a world of AI search and recommendations where travel experiences are more conversational, personal and even agentic. As we build out new AI products and capabilities, having the right infrastructure in place to evaluate and observe AI is important. Arize has been a valuable partner on that front,” said Rahul Todkar, Head of Data and AI at Tripadvisor.
“With GenAI, we’re facilitating more tailored experiences that adapt and respond to travelers’ needs faster than ever before. As we continue to innovate, our technical teams blend an approach of pioneering new tools in-house and using platforms like Arize to help in testing, evaluating and tracing new AI-powered applications and workflows,” said Jeroen Hofman, ML Engineering Manager at Booking.
“Arize AI deserves a lot of credit for pioneering AI observability and creating a de facto standard for enterprises that want to achieve real-world results with generative AI,” said Brett Wilson, General Partner at Swift Ventures. “We’re proud to continue to back the company as it scales.”