Deductive AI, a startup founded in 2023 that uses AI to catch and resolve software bugs, has agreed to be sold to Elastic for up to $85 million, according to a person with knowledge of the deal. Deductive came out of stealth last November when it announced a $7.5 million seed round led by CRV with participation from Databricks Ventures, Thomvest Ventures, and PrimeSet, which valued the startup at $33 million, according to PitchBook. The sale marks a speedy exit for Deductive, which operates in AI site reliability engineering (AI SRE). The acquisition reflects a broader trend of established tech incumbents buying AI-native startups to integrate agentic technologies, the source told TechCrunch. Integrating Deductive’s AI technology into Elastic will enhance its observability platform by giving customers tools to automatically monitor performance and resolve system failures in real time. Deductive reached roughly $1 million in annual recurring revenue (ARR), according to the source. Deductive was co-founded by Rakesh Kothari and Sameer Agarwal.