DeductiveAI, a young startup that uses artificial intelligence to root out and fix software bugs, has inked a deal to join enterprise software powerhouse Elastic in a $85 million acquisition.

Elastic, best known for its search and analytics engine Elasticsearch, is on the lookout to bolster its observability platform. DeductiveAI’s tech promises to automate performance monitoring and real-time resolution of system failures, making life easier for human engineers.

The deal marks a swift exit for DeductiveAI, founded in 2023 with backing from venture capitalists like CRV and Databricks Ventures. Its co-founder Rakesh Kothari has a background in engineering at established tech giants such as ThoughtSpot and Meta.

This acquisition is part of the broader trend where big tech players are gobbling up AI-focused startups to embed agentic technologies into their product suites, reflecting the growing importance of AI site reliability engineering (AI SRE) tools. The massive influx of AI-generated code means that manual debugging can be a thing of the past.

However, competition in this space is fierce, with rivals like Resolve AI also vying for market share and investor attention. While DeductiveAI has reached $1 million in annual recurring revenue, it’s lagged behind some competitors.