RCS - Innodata Inc. - Innodata Launches Federal Business Unit

InnodataAnnouncement

07/11/2025 08:15

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RNS Number : 5671G  Innodata Inc.  07 November 2025

Innodata Launches Federal Business Unit to Support Accelerating AI Innovation
Across U.S. Government

New Unit Positions Company to Serve Defense, Intelligence, and Civilian
Agencies with Proven AI Data Engineering, Generative AI, and Agentic AI
Solutions

NEW YORK, NY / ACCESS Newswire / November 7, 2025 / INNODATA INC.
(Nasdaq:INOD) today announced the launch of Innodata Federal, a dedicated
government-focused business unit designed to deliver mission-critical AI
solutions to U.S. defense, intelligence, and civilian agencies. The new unit
emerges as federal acquisition authorities are rapidly evolving to prioritize
commercial innovation through Other Transaction Authorities (OTAs), Commercial
Solutions Openings (CSOs), and streamlined procurement pathways that favor
speed, flexibility, and proven commercial capabilities.

The launch, announced alongside Innodata's earnings release and a press
release announcing that General (Retired) Richard D. Clarke, a retired
four-star Army general and former Commander of U.S. Special Operations
Command, has joined the Innodata board, positions the Company to capitalize on
an expanding federal AI market. Innodata Federal has already gained early
traction through strategic partnerships with leading defense technology
companies, defense contractors, and direct government awards, illustrating
expected strong market demand for the Company's end-to-end AI capabilities.

Dual-Track Strategy Expected to Deliver Immediate Revenue and Long-Term Growth

Innodata Federal's strategic approach is expected to balance near-term revenue
generation with sustainable growth. The unit has established prime contractor
partnerships that have already resulted in revenue while simultaneously
building the performance credentials and direct relationships essential for
larger government contracts.

Jack Abuhoff, CEO of Innodata, said "Innodata Federal represents a strategic
investment in a high-growth market where we believe our capabilities align
exceptionally well with government modernization priorities. We believe we
have structured our approach to succeed across all acquisition channels and
timeframes, whether rapid OTA awards, prime contractor partnerships, or
traditional procurement vehicles. The early momentum we are seeing - from
major defense technology leaders to direct government awards - validates both
our technical capabilities and our positioning for growth as the federal AI
market expands."

Early market validation includes contracts with prominent defense technology
companies, the Company's first direct government award from a major defense
agency, and submitted proposals spanning DoD, Intelligence Community,
and civilian agencies. The Company believes this diversified pipeline
approach - combining immediate prime contractor revenue with longer-term
direct government relationships - provides operational stability while
establishing the foundation for scalable federal revenue growth.

Comprehensive AI Solutions for Federal Missions

Innodata Federal brings to government customers a proven, enterprise-scale
portfolio of AI solutions - supporting agencies both building and deploying
mission-critical AI systems:

·      AI Data Engineering & Model Training: Innodata provides
high-accuracy data collection, annotation, and curation for computer-vision,
language, and multimodal AI systems. A global workforce of AI specialists
enables rapid scaling on large programs while maintaining 99 percent +
accuracy. Capabilities include image annotation for intelligence applications,
autonomous systems training, sensor fusion data preparation for multi-domain
operations, LiDAR and geospatial data annotation, synthetic data generation
for edge cases, and simulation environments for defense AI development.

·      Generative AI Solutions: The Company offers end-to-end support
for LLM fine-tuning, RLHF, reward modeling, prompt engineering, and
retrieval-augmented generation (RAG). Innodata builds multilingual instruction
datasets for mission-specific models for intelligence analysis, multilingual
communication, and mission planning.

·      Agentic AI & Intelligent Automation: Innodata designs AI
agents and copilots that autonomously execute complex workflows. These systems
drive automation in document processing, intelligence triage, and decision
support - enabling agencies to operate at the speed of relevance.

·      Model Evaluation & Safety: For critical government
requirements in high-stakes environments, Innodata performs adversarial
testing, bias detection and mitigation, safety and robustness evaluations,
hallucination detection, and compliance verification against government AI
ethics frameworks and responsible AI requirements.

·      Digital Transformation & Document Intelligence: Innodata
provides AI-powered document processing that turns unstructured data -
medical, legal, or operational - into structured intelligence. Suitable for
complex documents such as VA claims, medical assessments, benefits
adjudication, intelligence analysis.

·      Open-Source Intelligence: Real-time global monitoring across
print, broadcast, and social media using LLMs and proprietary AI analytics.
Capabilities include automated translation, sentiment and influence detection,
disinformation tracking, and event alerting - supporting strategic
communications, counter-disinformation, and situational awareness missions
worldwide.

"What sets Innodata Federal apart is our ability to deliver the entire AI
lifecycle - not just data annotation or point solutions, but true end-to-end
capability from data collection through model deployment and operational
support," said Vinay Malkani, Senior Vice President of Innodata Federal. "Our
platforms and expertise already serve the world's leading technology companies
and Fortune 1000 enterprises, including five of the 'Magnificent Seven'. We
now bring that same proven excellence to federal missions - with the security,
compliance, and speed government operations demand. Whether an agency needs
high-fidelity training data for intelligence imagery analysis, custom LLM
fine-tuning for document processing, autonomous agents for workflow
automation, medical intelligence for veterans' benefits, or OSINT capabilities
for threat monitoring, we are poised to deliver measurable mission impact at
commercial velocity."

Speed, Scale, and Security

Innodata Federal's competitive differentiation centers on three core
strengths:

·      Commercial Speed with Government Rigor: Rapid-response teams can
deploy within 24-48 hours for urgent requirements, delivering production-ready
AI solutions at commercial velocity while maintaining government-grade quality
and compliance standards. This agility - combined with ISO 9001 frameworks,
NIST 800-171 compliance readiness, and government-grade security protocols -
enables agencies to move at operational speed without sacrificing quality,
security, or regulatory compliance.

·      STEM Workforce with Security Clearances: Innodata Federal
maintains U.S. personnel with advanced STEM backgrounds in data science,
engineering, linguistics, and domain specialties who hold active U.S.
government security clearances. This workforce can execute sensitive projects
while providing subject matter expertise that improves solution quality -
critical for defense and intelligence AI applications where domain knowledge
and accuracy determine mission success. The Company intends to expand its
cleared workforce to meet classified program needs and is advancing facility
clearance processes to enable classified operations.

·      Enterprise Scale with Global Infrastructure: As a U.S.,
Nasdaq-listed company with 20+ global delivery centers and 24/7 operations,
Innodata provides the financial stability and operational capacity to scale
from prototype through full production. The Company serves Fortune 100
technology companies and major enterprises, demonstrating consistent ability
to handle multi-million-dollar, multi-year programs with sustained quality.
This proven enterprise infrastructure eliminates scaling risk for government
programs requiring sustained, high-volume operations and supports the full
spectrum of government AI initiatives - from rapid prototypes to large-scale
production deployments.

Federal Market Opportunity

As federal defense, intelligence, and civilian agencies accelerate AI adoption
to maintain technological superiority and operational efficiency, we believe
their demand for enterprise-grade AI solutions is likely to continue to
expand. The government's embrace of rapid acquisition authorities -
particularly the emphasis on commercial solutions and streamlined procurement
vehicles like OTAs and CSOs - creates structural advantages for companies that
can deliver commercial innovation at enterprise scale with government-grade
security and compliance.

Innodata Federal is pursuing opportunities across Department of Defense and
Intelligence Community agencies, where the Company delivers end-to-end AI
solutions including AI data engineering for imagery intelligence, autonomous
systems training, geospatial intelligence analysis, signals intelligence,
sensor fusion (LiDAR), and multi-domain operations; generative AI solutions
featuring supervised fine-tuning, model training, RLHF/DPO, RAG development,
and prompt engineering for mission-specific model customization; agentic AI
development for automated document processing, intelligent workflow
automation, and decision support systems; and model safety and red teaming .
The Company also targets civilian agency opportunities with AI-driven
solutions for cybersecurity data tagging, infrastructure monitoring, earth
observation, medical intelligence extraction, fraud detection, and regulatory
compliance automation. Additionally, the Company pursues strategic
partnerships with major defense integrators and systems contractors, providing
specialized AI data engineering, model training, generative AI fine-tuning,
agentic AI, and model evaluation capabilities within larger government
programs.

The Company has been able to use the time during the recent government
shutdown to deepen connections, recruit top talent, and expand infrastructure.

About Innodata Inc.

Innodata (Nasdaq:INOD) is a global data engineering company. We believe that
data and Artificial Intelligence (AI) are inextricably linked. That's why
we're on a mission to help the world's leading technology companies and
enterprises drive Generative AI / AI innovation. We provide a range of
transferable solutions, platforms and services for Generative AI / AI builders
and adopters. In every relationship, we honor our 35+ year legacy delivering
the highest quality data and outstanding outcomes for our customers.

Recently recognized by Wedbush Securities as one of 30 companies defining the
future of AI, Innodata has been noted for expertise in domain-specific,
high-accuracy AI solutions where precision, compliance, and subject matter
expertise are essential. The Company serves five of the "Magnificent Seven"
tech giants, leading AI innovation labs, and numerous Fortune 1000
enterprises, providing critical data engineering services that power the next
generation of AI innovation. With Innodata Federal, we extend our mission to
support U.S. government agencies with AI solutions that enhance national
security, improve government services, and accelerate digital transformation.

For more information, visit www.innodata.com.

Forward-Looking Statements

This press release may contain certain forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and
Section 27A of the Securities Act of 1933, as amended. These forward-looking
statements include, without limitation, statements concerning our operations,
economic performance, financial condition, developmental program expansion and
position in the generative AI services market. Words such as "project,"
"forecast," "believe," "expect," "can," "continue," "could," "intend," "may,"
"should," "will," "anticipate," "indicate," "guide," "predict," "likely,"
"estimate," "plan," "potential," "possible," "promises," or the negatives
thereof, and other similar expressions generally identify forward-looking
statements.

These forward-looking statements are based on management's current
expectations, assumptions and estimates and are subject to a number of risks
and uncertainties, including, without limitation, impacts resulting from
ongoing geopolitical conflicts; investments in large language models; that
contracts may be terminated by customers; projected or committed volumes of
work may not materialize; pipeline opportunities and customer discussions
which may not materialize into work or expected volumes of work; the
likelihood of continued development of the markets, particularly new and
emerging markets, that our services support; the ability and willingness of
our customers and prospective customers to execute business plans that give
rise to requirements for our services; continuing reliance on project-based
work in the Digital Data Solutions ("DDS") segment and the primarily at-will
nature of such contracts and the ability of these customers to reduce, delay
or cancel projects; potential inability to replace projects that are
completed, canceled or reduced; our DDS segment's revenue concentration in a
limited number of customers; our dependency on content providers in our
Agility segment; our ability to achieve revenue and growth targets; difficulty
in integrating and deriving synergies from acquisitions, joint ventures and
strategic investments; potential undiscovered liabilities of companies and
businesses that we may acquire; potential impairment of the carrying value of
goodwill and other acquired intangible assets of companies and businesses that
we acquire; a continued downturn in or depressed market conditions; changes in
external market factors; the potential effects of U.S. global trading and
monetary policy, including the interest rate policies of the Federal Reserve;
changes in our business or growth strategy; the emergence of new, or growth in
existing competitors; various other competitive and technological factors; our
use of and reliance on information technology systems, including potential
security breaches, cyber-attacks, privacy breaches or data breaches that
result in the unauthorized disclosure of consumer, customer, employee or
Company information, or service interruptions; and other risks and
uncertainties indicated from time to time in our filings with the Securities
and Exchange Commission ("SEC").

Our actual results could differ materially from the results referred to in any
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, the risks discussed in Part I,
Item 1A. "Risk Factors," Part II, Item 7. "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and other parts of
our Annual Report on Form 10-K, filed with the SEC on February 24, 2025, and
in our other filings that we may make with the SEC. In light of these risks
and uncertainties, there can be no assurance that the results referred to in
any forward-looking statements will occur, and you should not place undue
reliance on these forward-looking statements. These forward-looking statements
speak only as of the date hereof.

We undertake no obligation to update or review any guidance or other
forward-looking statements, whether as a result of new information, future
developments or otherwise, except as may be required by the U.S. federal
securities laws.

Company Contact

Aneesh Pendharkar
investor@innodata.com (mailto:investor@innodata.com)

(201) 371-8000

SOURCE: Innodata Inc.

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