Enterprise software company Elastic has agreed to acquire DeductiveAI, an AI startup focused on finding and fixing software bugs, in a deal valued at up to $85 million, according to a person familiar with the transaction.
Founded in 2023, DeductiveAI emerged from stealth last November with a $7.5 million seed round led by CRV, alongside Databricks Ventures, Thomvest Ventures, and PrimeSet. At the time, the startup was valued at $33 million.
The company operates in the fast-expanding field of AI site reliability engineering, where intelligent systems help automate debugging and incident response. This approach is gaining momentum as more software is written with AI support, increasing the need for tools that can monitor systems and resolve issues faster.
Elastic, known for Elasticsearch and its observability tools, is expected to strengthen its platform with DeductiveAI's technology. The integration could help customers automatically track performance, identify failures, and respond to system issues in real time.
DeductiveAI was co-founded by Rakesh Kothari, formerly VP of engineering at ThoughtSpot, and Sameer Agarwal, who previously worked at the Apache Software Foundation and Meta. Agarwal was also among the founding engineers at Databricks.
With this acquisition, Elastic signals a broader shift in enterprise software toward AI-native capabilities that blend search, analytics, and autonomous operations. The next phase of observability may be defined by systems that not only detect problems, but help solve them before they slow innovation.