iLearningEngines CEO Sets the Record Straight
iLearningEngines (“iLE”) remains committed to innovation and customer success
According to iLE CEO Harish Chidambaran, “It is essential to correct these egregious misstatements. iLearningEngines has a long-standing track record, audited financials, and has delivered significant innovation in AI for enterprise learning and work automation.” This response aims to dispel some of the short seller’s inaccuracies.
Mr. Chidambaran provided the following information to set the record straight:
False Allegations and Inaccuracies
Audits and Revenue
Allegation: The report insinuates that iLearningEngines’ revenue is unverified and potentially fraudulent.
Refutation: iLearningEngines has undergone extensive third-party audits and reviews by leading financial institutions. Financials have also been reviewed by another globally known accounting firm. Finally, revenues and financials have been reviewed by our lenders. As part of these reviews, iLE has shared its customer contracts. Western Technology Investments (WTI), a top-tier Silicon Valley lender with customers including Google, Meta and Palantir, has provided debt financing to iLearningEngines from 2020 through April 2024. Over this period of time, iLE has paid interest on the $40 million of debt from operations, has never been late on a payment, and paid back roughly $60 million in principal and interest in full. Under our recent lending facility, we have transitioned to receiving our customer revenues flows directly into iLearningEngines’ controlled bank accounts.
Global Operations and Indian Revenue
Allegation: The short seller alleges that iLearningEngines’ $216 million in revenue from India is fabricated because iLE India only reports $853,000 in revenue.
Refutation: This claim either reflects a fundamental misunderstanding of global operations, or a deliberate attempt to deceive. iLE India is a fully owned subsidiary functioning as an offshore development center, and its “revenue” reflects the local operational expenses, such as software engineer salaries, charged back to iLE US, the parent company. This is standard industry practice for multinational corporations, where all significant revenues flow through the parent company (iLE US). The report’s decision to present this structure as suspicious is either grossly uninformed, or intentionally misleading to sow confusion.
In2vate
Allegation: The report claims iLearningEngines’ US revenue is fraudulent because In2vate, a subsidiary, reportedly has less than $1 million in revenue and can’t account for the company’s total revenue.
Refutation: This allegation misrepresents the structure of iLearningEngines. In2vate is a separate subsidiary that currently reports its own revenue. The majority of iLearningEngines’ US revenue is contracted directly through iLE US, and not In2vate. iLE US was well into existence before the In2vate acquisition. iLE also has more than four million licensed users across various agreements, excluding In2vate users.
Partner Network
Accusation: The report implies that iLearningEngines’ partner relationships are either fabricated or improperly disclosed.
Refutation: iLearningEngines has developed and nurtured strong partnerships with more than 30 value-added resellers (VARs) and technology partners who play a crucial role in expanding our platform’s reach. These partners include cognitive solutions such as Exult Global, Techvantage Systems, Vedhik Schools, and Experion. They bring our AI solutions to industries that require tailored applications for enterprise learning and work automation. Our channel partners operate across various regions and industries, allowing us to scale efficiently by leveraging their expertise in technology integration, professional services, and customer support - and in some cases, distribution. These partnerships are a core aspect of iLE’s business model, ensuring that our AI platform is delivered effectively to end users while maintaining operational efficiency. Many of our partners have long-standing relationships with Global 2000 customers, helping us deploy AI solutions that solve complex industry challenges. iLearningEngines has shared customer contracts and relationships with the auditor and lenders.
Experion
Allegation: The short seller’s report raises concerns about the validity of Experion and its partnership with iLearningEngines.
Refutation: The relationship between iLearningEngines and Experion is based on a long-standing technology and VAR partnership that began in 2012. Experion provides outsourced R&D services and built-in distribution to its existing customers, helping iLearningEngines scale efficiently. This is a fairly common practice amongst global technology companies. iLE owns all intellectual property (IP) related to its product, while Experion earns R&D and professional service revenue for integrating the platform into enterprise workflows for joint customers. Currently, a majority of iLE revenue comes from partnerships outside of Experion, thereby clearly refuting the short seller’s allegation. The company works with approximately 30 VARs that we have global partnerships with. Our revenue stream is diversified across multiple customers and channels, and iLE has full control over its technology and product. This partnership enables iLE to ramp up or ramp down teams during the course of product development, helping achieve significant capital efficiency.
The company’s CEO was asked in 2013 to serve as an advisor and US contact to Experion due to his expertise and was never compensated for this role. There is no mutual ownership between iLE and Experion.
Product and AI Platform
Allegation: The report asserts that iLearningEngines has no real product, implying that the company’s entire business is fraudulent.
Refutation: This is one of the most egregious and outrageous claims made by the short seller report. iLearningEngines has developed an enterprise-grade AI platform relied on by over 1,000 companies and over four million users. The platform is the outcome of hundreds of thousands of hours of R&D, producing more than 50 enterprise-specific AI models. These models are tailored to vertical-specific use cases and are capable of being deployed in secure, on-premise environments. This is critical for industries that require high levels of data protection. The company has over 30 hyper automation apps (“hyperapps”) built on its platform.
Paid For Training Data
Allegation: The report claims that iLearningEngines’ purchasing of data from a partner, specifically Experion, is an unlikely coincidence.
Refutation: The training data mentioned in the short seller report is sourced from customers including one long-standing customer from the education space which is not Experion. iLE does not purchase Experion’s data as stated by the short seller. This is flat out wrong. It has been the long-standing policy of the company to purchase data in order to train AI models, which has become the market standard. Since 2018, iLE has recognized the value of compensating data owners and entered into data purchasing agreements. This was the right thing to do and also reduces IP risks for us and our customers. This has now become standard practice in the AI industry. These purchases are separate from any revenue relationship with them. Independent appraisals conducted by a Big Four auditing and consulting firm validated the fair value of the data, providing further credibility to our approach. This specialized data enhances the effectiveness of iLearningEngines’ AI models and opens up significant opportunities for data monetization.
Customers
Allegation: The short seller asserts that iLearningEngines has no presence nor present customers.
Refutation: iLearningEngines serves a robust portfolio of clients, including leading corporations, educational institutions, and healthcare systems. The short seller should know that a white label product by definition will be unknown to the end user. Additionally, technology partners and VARs have built apps utilizing our enterprise AI models, making iLE less visible as a brand to the end user. This is similar to many other infrastructure platforms' relationships with end users. End customers include global brands such as Accenture, Allianz SE, Nissan, H&R Block, NIP Group, Mahindra, Tata Communication, Hindalco, Piramal Group, Prudential, as well as hundreds of educational institutions and enterprise clients.
Vedhik Schools
Allegation: The report infers that Vedhik Schools is the sole driver of iLearningEngines’ Indian revenue.
Refutation: The short seller’s report inaccurately presents Vedhik Schools as a direct customer, when in fact, they are a content partner. Vedhik collaborates with iLearningEngines to deploy AI-powered educational solutions. Their role is to deliver high-quality content through our platform to schools across India, the Middle East, and Africa. This partnership supports AI-driven tutoring and personalized learning in over 300 schools. The Indian market is an immense opportunity with more than 1 million schools and over 250 million students in India alone, according to Statisca. The relationship highlights iLE’s ability to scale through strong partnerships, rather than direct sales alone. As highlighted above in the Customer section, the students (end users) using the tutoring solution, could be unaware that iLE is powering their experience. More importantly, this partnership transforms education, improving student performance and learning outcomes through AI.
Global Remote-First Operations
Accusation: The report inaccurately claims that iLearningEngines operates out of the CEO’s house.
Refutation: In the US and in some parts of the world, iLearningEngines is a fully remote-first company. This was true even prior to the pandemic; a strategic decision that aligns with the modern workforce. The iLE team operates across multiple regions, supported by fully equipped offices, co-working spaces, and through a global network of outsourcing partners. This approach allows iLE to attract top talent globally and stay agile. The reference to the CEO’s home is irrelevant and misleading, as the company’s operations span a wide geographical footprint – from the US to India, Dubai, and beyond. iLE is structured for efficiency and scalability, not constrained by traditional office setups. The short seller has reverted to doxing the CEO’s home and risking the safety of people, their families, and their children.
Another clearly false insinuation in the report is regarding Sanjeev Menon. Sanjeev is our Chief AI Architect. He is an exceptional talent, with multiple AI and other technology ventures behind him. Under his leadership, iLE has a highly functional product team based out of Pune and other locations.
iLearningEngines’ Commitment to Innovation and Customer Success
The strength of iLearningEngines lies not just in its technology, but in the value we provide to our customers. We have consistently delivered solutions to enterprises seeking tailored AI tools for learning and work automation. Our platform’s capabilities, including vertical domain-specific AI learning models, position iLearningEngines as a leader in the AI space. Our customers range from major corporations to educational systems, with millions of students and professionals benefiting from our products. This success is reflected in long-term contracts, valued partnerships, and continued revenue growth.
iLearningEngines is a company built on strong fundamentals, a proven product, and a commitment to transparency. We urge investors to rely on fact-based due diligence rather than a short seller’s motivation to drive the stock price down. iLearningEngines remains focused on innovation and delivering value to its customers and shareholders, as we continue to grow in a rapidly evolving market.
At iLearningEngines, our primary focus has always been on building innovative products, solving real-world problems, and serving our customers. However, we recognize the need for more proactive and transparent communication to better engage with our investors and the public. Moving forward, I am committed to prioritize clearer, more frequent updates about our progress and operations to our investors and shareholders.