Alterra Labs, a New York startup that builds simulated medical environments to test and train AI models, has raised a $12.5 million seed round. Oak HC/FT led the round, with Flare Capital Partners and Company Ventures participating. The company tests models on medical tasks, finds where they fail, and turns those failures into training exercises. Doctors and scientists help design the tasks and judge the models' decisions, and their assessments become scoring criteria for reinforcement learning. Founder and chief executive officer Akash Kapoor said models can learn to operate software but still lack clinical judgment. "It has a lot of knowledge," he said. "It lacks a lot of judgment." Kapoor started the company in 2025 while at Columbia Medical School. Frontier AI labs are its fastest-growing customer group, and it earns revenue from training environments and post-training services.