DeductiveAI, a startup leveraging artificial intelligence to detect and fix software bugs, has agreed to be acquired by enterprise software firm Elastic for up to $85 million, a source familiar with the transaction confirmed.

Founded in 2023, Deductive emerged from stealth last November after raising a $7.5 million seed round led by CRV, with participation from Databricks Ventures, Thomvest Ventures, and PrimeSet. At the time, the investment valued the startup at $33 million, according to PitchBook data. Neither Elastic nor Deductive responded to multiple requests for comment.

The sale represents a rapid exit for Deductive, which operates in the fast-growing field of AI-powered site reliability engineering (AI SRE). This sector has gained momentum as the surge in AI-generated code drives demand for automated debugging tools. By replacing manual troubleshooting with AI, these tools allow human SREs to shift their focus from constantly addressing outages and other issues to contributing more to product development.

Elastic, which went public in 2018, is best known for Elasticsearch, a search and analytics engine that helps organizations store, search, analyze, and monitor large volumes of data in near real time. The company’s observability software—tools that enable engineers to monitor software systems and detect security threats—stands to benefit from Deductive’s technology. According to the source, integrating Deductive’s AI into Elastic will enhance its observability platform by providing customers with automated performance monitoring and real-time system failure resolution.

Deductive was co-founded by Rakesh Kothari, formerly vice president of engineering at Lightspeed-backed business analytics startup ThoughtSpot, and Sameer Agarwal, who previously worked at Apache Software Foundation and Meta. Agarwal was also one of the founding engineers at Databricks.

While Deductive had reached approximately $1 million in annual recurring revenue (ARR), according to the source, its growth lagged behind Resolve AI, a perceived early leader in the sector. The two-year-old Resolve was co-founded by former Splunk executive Spiros Xanthos and Mayank Agarwal. The Greylock and Lightspeed-backed startup was last valued at $1.5 billion after raising a $40 million Series A extension in April.