Velvet

Velvet is an innovative technology company that specializes in AI evaluation and observability tools, designed to enhance the performance of AI-powered applications for various industries. Founded in 2023 in New York, US, Velvet focuses on providing advanced AI observability solutions. The company was acquired by Arize AI in March 2025 to strengthen its platform capabilities. The founder's background is not disclosed, and there are no known subsidiaries or parent companies.

Arize, through its acquisition of Velvet, offers a robust suite of AI evaluation and observability tools designed to support the development and optimization of AI-powered applications. The core product is the Arize Unified Observability and Evaluation Platform, which enables organizations to analyze, monitor, and enhance the performance of their AI models in real time. Complementing this are open-source initiatives such as Phoenix, which focuses on LLM (Large Language Model) tracing and evaluation, allowing developers to seamlessly optimize their AI applications. Additionally, the LiteLLM gateway provides access to over 100 LLMs, including failover mechanisms and spending tracking, all formatted to integrate with OpenAI systems.

These products cater to a diverse clientele across various industries, including technology, finance, and healthcare, focusing on end-users such as data scientists, AI developers, and enterprises looking to leverage AI solutions in North America and Europe. Arize’s revenue model is structured primarily around subscriptions and partnerships, allowing clients to access its suite of AI tools and services. Businesses pay for tiered subscription plans that provide varying levels of access to the Arize platform, including the advanced features of the Unified Observability and Evaluation Platform. Clients typically engage in annual contracts that ensure ongoing support and updates, enhancing their AI capabilities over time.

The company’s flagship offerings, including the LiteLLM gateway and the Phoenix evaluation tool, are central to its revenue-generating strategies. Transaction structures are designed to foster long-term relationships with clients, ensuring that they can continuously refine their AI systems as technology evolves. The acquisition of Velvet by Arize AI, Inc. in March 2025 is set to enhance its artificial intelligence observability and model evaluation capabilities by integrating Velvet’s developer-focused tools and expertise.

Future product launches are expected as Arize plans to incorporate Velvet’s innovations into its offerings. The company aims to expand its market presence in Europe and North America by the end of 2025, utilizing the resources gained from this acquisition to support the development of new AI tools and enter new geographic regions.