Startup takes on AI hallucinations with $25M and an HQ rooted in a small town south of Seattle.

Resect AI, an artificial intelligence startup led by a team of scientists and engineers in Washougal, Wash., launched out of stealth Thursday with $25 million in funding to commercialize an open-source technology designed to catch AI hallucinations before they happen.

Unlike traditional AI monitoring tools that evaluate generated text after the fact, Resect AI says its patented technology operates in-stream — looking deep inside large language models in real time to observe, detect, interpret, and modify model behavior before a hallucination can occur.

By intervening directly within the model’s internal decision-making process rather than running post-hoc checks, the platform stops fabrications at the source while simultaneously generating an audit trail for enterprise compliance and due diligence.

“AI has prematurely been put in a position of trust. Adding labels such as ‘use at your own risk’ flies in the face of proper governance or compliance,” Kevin Owens, co-founder and CEO of Resect AI, said in a news release. “We are building the next large enterprise AI company to bring transparency and accountability to AI for industries such as publishing, finance, healthcare, research, and education where factual accuracy is absolutely critical.”

Beyond its tech, the startup’s leadership is also bullish about its small-town presence.

Washougal is a city of roughly 18,000 residents, 175 miles south of Seattle, tucked along the Columbia River across from Portland. Resect AI employs four people at an office on Main Street — including its co-founders — out of a 30-person workforce spread across the Seattle area, California, New York, and Texas.

“We believe the talent is up to par and we loved the sense of community that we found when we first came up here,” Owens told GeekWire. “We have been coming to the greater Washington and Oregon areas on and off over the years and finally decided this needed to be our headquarters.”

Owens said the decision has already paid off, noting that the startup has quickly tapped into the region’s talent pool by recruiting PhDs from both the greater Seattle and Portland markets while connecting with Northwest capital markets leaders.

Resect AI is also planning to open an office in the Seattle area in the near future for engineering and to serve as a business hub.

Alongside Owens, Resect’s other co-founders include Tim Walton, chief artificial intelligence officer; Tyler Gerber, chief operating officer; and Tommy Lofgren, chief product and marketing officer.

The company plans to use the funding to accelerate research and development, expand its go-to-market initiatives, and fuel talent acquisition — bringing its total headcount to 50 by the end of 2026.

FAQs

Why do enterprises lack trust in AI?

Enterprises are hesitant to trust AI due to persistent model inaccuracies and unpredictable hallucinations. Until AI output can meet stringent governance and compliance standards, widespread enterprise adoption will remain limited.

What can be done to accelerate adoption of AI in the enterprise?

LLM providers need to eliminate hallucinations and optimize their models for factual accuracy and consistency to make AI measurable, scalable and dependable for the enterprise.

Is Resect hiring?

Yes, Resect is hiring engineering and research roles in the greater Seattle and Portland markets.

About Resect Artificial Intelligence

Resect™ AI was established by a team of serial entrepreneurs with deep roots in AI and data science. The company's mission is to build the accountability layer for artificial intelligence by removing or 'resecting' hallucinations and improving the factual accuracy of large language models. Resect AI is led by a highly passionate and experienced business and research team in the Pacific Northwest with an office in the greater Portland area.