Elastic reportedly acquires site reliability engineering startup Deductive AI

Elastic NV has reportedly acquired Deductive AI Inc., a startup with a platform that helps enterprises fix errors in their technology infrastructure.

TechCrunch on Thursday cited a source as saying that the deal is worth up to $85 million. That’s reportedly more than double the valuation Deductive received after its seed round last year. The raise included the participation of Databricks Inc.’s venture capital arm, CRV and other prominent backers.

NYSE-listed Elastic develops a popular open-source search engine called Elasticsearch. The company monetizes the tool with paid cloud versions that enterprises use to embed search bars in their websites, detect cyberattacks and troubleshoot application errors. The Deductive acquisition will expand Elastic’s capabilities in the latter area.

Deductive describes its platform as an AI SRE, or site reliability engineer. An SRE is a technology professional tasked with optimizing the reliability of a company’s infrastructure and fixing outages. Deductive says that its platform troubleshoots malfunctions using the same tools as human SREs, including Elasticsearch.

Deductive uses Elastic’s open-source search engine and other  observability tools to gather data about a company’s infrastructure. When a technical issue crops up, the platform scans the collected data for clues about its cause. It carries out the process by generating multiple hypotheses and spinning up AI agents to test them in parallel.

Running an ensemble of AI agents can incur significant hardware costs. According to Deductive, its software uses “state-of-the-art approximation techniques” to minimize infrastructure requirements. Approximate querying is a search technique that trades off some output accuracy for increased hardware efficiency.

Engineers can customize Deductive by typing in natural language technical advice. For example, a user could explain how the platform should troubleshoot a certain application or enter a description of the program’s core components. Deductive also learns from feedback that developers provide in response to its incident response suggestions.

The platform visualizes each step of the workflow through which it generates troubleshooting advice. According to Deductive, that information enables developers to verify the accuracy of its output and find areas for improvement.

The company’s platform is reportedly generating about $1 million in annualized recurring revenue. Deductive counts DoorDash Inc., Foursquare Inc. and several other tech firms among its customers.

Deductive is the second troubleshooting automation startup that Elastic has acquired since the start of 2025. It previously bought Keep Alerting Ltd, which developed an AI platform that can analyze outage alerts and identify the root cause. Elastic integrated the company’s technology with its open-source Kibana data visualization tool and Elasticsearch.

Photo: Deductive AI