Elloe AI builds immune system to catch AI hallucinations and bias

Elloe AI is developing what founder Owen Sakawa calls an “immune system for AI” — a security layer that checks AI model outputs for bias, hallucinations, compliance violations, and misinformation. The startup, a Top 20 finalist in TechCrunch Disrupt 2025’s Startup Battlefield, aims to address the rapid evolution of AI systems that currently operate “without guard rails, without safety nets, without mechanism to prevent it from ever going off the rails.”

How it works: Elloe AI operates as an API or SDK that sits on top of existing AI models’ output layers, essentially fact-checking every response through multiple verification anchors.

• The first anchor fact-checks LLM responses against verifiable sources to combat hallucinations and misinformation.
• The second anchor screens outputs for regulatory compliance violations, including HIPAA health privacy laws, GDPR data protection requirements, and exposure of personally identifiable information (PII).
• The final anchor creates an audit trail documenting decision-making processes, confidence scores, and source verification for regulatory review and system analysis.

The technical approach: Unlike many AI safety solutions, Elloe AI deliberately avoids using large language models to monitor other LLMs, which Sakawa describes as putting a “Band-Aid into another wound.”

• The system instead relies on machine learning techniques and other AI methods that don’t involve LLM-to-LLM checking.
• Human oversight remains central to the platform, with Elloe AI employees continuously updating the system to reflect new regulations on data protection and user safety.

Why this matters: The platform addresses a critical gap in AI deployment as organizations increasingly integrate AI systems into business operations without comprehensive safety mechanisms.

• Companies face growing regulatory scrutiny over AI outputs, particularly regarding data privacy, bias, and misinformation risks.
• The multi-layered approach provides both real-time protection and the audit capabilities that regulators and compliance teams require for AI system oversight.