Dili raises $21.7M to bring AI compliance to the infrastructure boom

We already know that making AI work will mean bringing a lot of new data centers and power infrastructure online. But all those infrastructure projects may also need a bit of help from AI.

On Thursday, a new AI compliance company called Dili that squarely targets the new crop of U.S. infrastructure projects, said it had raised $15 million in Series A funding. The round comes on the heels of a $6.7 million seed round, bringing the company’s total capital raised to $21.7 million.

The Series A was led by Khosla Ventures, with participation from Allianz, Rebel Fund, Brick and Mortar Ventures’ Darren Bechtel, and Y Combinator’s Garry Tan. Dili was previously part of Y Combinator’s Summer 2023 batch.

“AI for compliance” is already a common pitch among startups, but Dili focuses on the unique tangle of rules concerning construction projects, particularly those getting some kind of federal funding.

Asked for an example, Dili’s co-founder and CEO Anand Chaturvedi pointed to Davis-Bacon rules, which allow the Department of Labor to set prevailing wages for certain projects. A separate set of prevailing wage and apprenticeship rules (or PWA rules) apply to clean energy projects funded under the IRA, with various other OSHA or EPA rules in effect depending on the nature of the work.

It’s a complex set of overlapping requirements, and even small mistakes can be costly. “Non-compliance can result in millions of dollars of fines for those projects,” explains Chaturvedi. “So it’s really powerful to be able to check all the information as it comes in, instead of just sampling data.”

Given those high stakes, reliability is a central concern, but Chaturvedi believes Dili’s architecture will prevent any LLM-based fuzziness from sneaking into the final product. Contemporary AI models are only used in the company’s data layer, the engine for taking unstructured documents and translating them into structured data. From there, a deterministic system sorts the data according to the complex-but-static compliance rules. When it works right, a task that used to take a full day’s work can now be dispatched in a matter of minutes.

“Imagine being able to read across the entire context of a company’s internal documents, all of their vendors’ documents, all of their ERP information, all of their payroll systems information, and then draw out the data that you need specifically for you know reporting or compliance,” Chaturvedi explained.

Dili is already making that system work in practice. Chaturvedi says the software is already being used at “about 700 projects,” ranging from manufacturing facilities to data centers.

Notably, Chaturvedi says roughly half the projects are using Dili as an in-house software tool, while the other half outsource the entire compliance process to the company on a contractor model. Dili is able to handle both types of contract, although Chaturvedi anticipates the industry will shift more towards the software model in the years to come.

“Software and AI are going to start eating a lot of those professional services workflows, so I think more and more people will start to bring those in-house,” Chaturvedi says. “The interesting thing will be how the market itself evolves and where the customer needs go as AI develops.”