DeductiveAI, a startup using AI to detect and resolve software bugs, has agreed to be acquired by Elastic for up to $85 million, according to a source familiar with the deal. Founded in 2023, Deductive emerged from stealth last November with a $7.5 million seed round led by CRV, valuing the company at $33 million. The startup operates in AI site reliability engineering, a fast-growing sector driven by the increase in AI-written code. The acquisition will enhance Elastic's observability platform by adding tools to automatically monitor performance and resolve system failures in real-time. Deductive was co-founded by former ThoughtSpot VP Rakesh Kothari and ex-Databricks engineer Sameer Agarwal. The startup had reached roughly $1 million in annual recurring revenue before the sale.

Deductive AI formally launches with $7.5M in funding. Deductive AI, a Mountain View, CA-based company which specializes in AI-powered root cause analysis and resolution, raised $7.5M in Seed funding. The round was led by CRV, with participation from Databricks Ventures, Thomvest Ventures and PrimeSet. The company intends to use the funds to expand operations and its development efforts. Led by Sameer Agarwal, co-founder and CTO, and Rakesh Kothari, co-founder and CEO, Deductive AI is building AI SRE agents that connect codebases and telemetry data to guide incident response from detection to resolution. At its core, Deductive AI is a unified platform for deploying and training AI agents that connect to an organization's code, logs, metrics, traces, and events, capable of reasoning on a constantly updated knowledge graph that maps relationships between systems, enabling them to test hypotheses, evaluate evidence, and pinpoint precise root causes in seconds.