Distyl AI raises $175M in funding at $1.8B valuation to scale AI consulting platform

Distyl AI, the enterprise-focused AI startup founded by former Palantir engineers, has raised $175 million in fresh funding at a $1.8 billion valuation, signaling growing demand for AI systems that can actually move the needle for big companies.

According to a report from The Information, the AI consulting startup, “founded by ex-Palantir staff to help companies like T-Mobile integrate AI, was recently valued at $1.8 billion by Lightspeed and Khosla.”

Founded three years ago by Arjun Prakash and Derek Ho, Distyl AI is building a reputation as the consultancy Fortune 500 firms call when they want results, not endless pilots. Both founders spent nearly a decade at Palantir rolling out complex data solutions, and they’ve pulled together a team of researchers and engineers from OpenAI, Apple, and top research labs. Investors like to describe them as a “SEAL Team Six of AI engineering.”

Palantir Veterans’ AI Startup Distyl Valued at $1.8B Valuation by Lightspeed and Khosla.

The company focuses on embedding AI directly into core business operations—projects that can deliver nine-figure value shifts for clients. Its Distillery Platform is designed to drop into existing systems and start producing results in weeks instead of years. That pitch has already landed clients across telecommunications, healthcare, insurance, retail, and manufacturing. T-Mobile is one of the early case studies, using Distyl to sharpen operational efficiency.

Distyl’s approach leans on outcome-driven partnerships. Instead of parking consultants in boardrooms for months, the company delivers initiatives that automate workflows and solve problems that actually matter to enterprise clients. Its partnership with OpenAI has helped tie the latest foundation models to real-world deployments, giving companies a way to move from experimentation to adoption.

The funding story tracks the startup’s rapid rise. Distyl started with a $7 million seed round in April 2023 led by Coatue and Dell Technologies Capital. Later that year it pulled in $20 million for a Series A led by Lightspeed Venture Partners, joined by Khosla Ventures, Nat Friedman, and others. Now comes the $175 million round at a post-money valuation of $1.8 billion, again backed by Lightspeed and Khosla. The Information first reported the deal.

Investors are betting that Distyl is positioned to take a slice of the projected $300 billion enterprise AI market, which is growing at about 20% annually. Unlike legacy consulting firms, Distyl says it can deliver results with smaller teams at a fraction of the cost. That model has struck a chord with clients wary of AI hype but hungry for impact.

The new cash will help Distyl expand its team, refine its platform, and deepen strategic partnerships. For CEO Arjun Prakash, the mission is straightforward: reshape how large enterprises operate with AI, without the expensive detours and false starts that have plagued so many corporate projects.

From a modest seed round two years ago to a valuation of over $2 billion today, Distyl AI has gone from a Palantir spinoff to one of the most closely watched players in enterprise AI. With this latest raise, it’s betting the demand for high-stakes, high-value AI deployments is just getting started.