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 6, 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
(201) 371-8000

SOURCE: Innodata Inc.

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