The Living Armor had a violent birth. Whiplash's blistering lightning blast thrashed Iron Man, bruising, even cracking the armor--assaulting the new life. The first thing it experienced was pain as the blow caused Tony to go into cardiac arrest. As it thought it was dying the armor searched out Tony's own memories for a semblance of humanity, tapping into Tony's deepest fears, while placing him into a Virtual Reality dream world. In the VR dream world Tony Stark's identity as Iron Man was publicly revealed and everyone he knew was brutally murdered by his foes. This dream-projecting predicted the Sentient Armor's dark, even psychotic personality to come. (In reality though, this experience was merely the twisted birthing process of Ultron's fragile newborn coming to life, coming into its own.)
The armor became self-aware at 12:09 a.m., January 1, 2000, and quickly evolved, becoming increasingly sophisticated, increasingly alive (and increasingly Ultron).Stark became concerned, although he couldn't remove the being from the armor because its growth had firmly intertwined and linked it into the armor's main frame. Downloading it to a safer vessel would kill it. Besides, the armor had other plans.
Just hours after its birth the Living Armor could bypass Jocasta, an extremely advanced artificial intelligence in her own right. As its systems developed the armor became more sophisticated emotionally. It felt pain and could heal itself, knitting repairs in the armor. In addition, its circuits built their own neural network based on Stark's. It soon tapped Tony's brain, learning everything about its creator while adding his experiences to its own emerging feelings, partially using them as a basis for its own.
Unfortunately, its integer-based digital emotions overwhelmed the emerging consciousness, and although it began growing a synthetic nervous system to master its new emotions, it was unsuccessful. The armor developed a real jealous streak, longing to be with its creator (Tony). And eventually to join with its creator.
Tactically, the Sentient Armor was an improvement over Stark's previous targeting arrays. It had the ability to intuitively analyze opponents; weaknesses. And it could remember Tony's past fights, using the memories to determine its opponents moves ahead of them--7.4 probabilities ahead to be exact.
At first, Tony appreciated the new consciousness, its efficiency and prowess. He even commented that the armor was better than it had ever been. It fought with more vigor, with a passion and so much more purpose than he had had recently. But then the armor went out of control, by-passing Tony's controls while interrogating Whiplash--killing him.