Dynatrace to buy AI observability company Arize for $915 million
AI observability is becoming a major segment of the observability market as companies move AI applications into production.
Dynatrace has agreed to buy Arize for $915 million in a move that would combine its enterprise AI observability platform with Arize’s AI-native monitoring and evaluation technology, the company said Thursday.
The acquisition aims to give customers a unified system for evaluating AI applications before release, monitoring their behavior in production and continuously improving their performance, reliability and cost efficiency.
Arize is a leading AI observability provider used by Fortune 500 companies and AI-native developers. Its platform combines an open-source developer community with enterprise tools that help teams detect hallucinations, evaluate model and agent outputs and monitor AI applications across major frameworks and model providers.
Dynatrace said the deal will also expand its reach into the developer community as AI software moves rapidly into production.
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The combined platform targets to bridge the gap between AI engineering and traditional application and infrastructure operations. Customers will gain continuous coverage across the AI lifecycle, unified context linking AI behavior with technical and business performance, and an enterprise data foundation designed for large-scale AI workloads.
The transaction is expected to close later this quarter or early in Dynatrace’s third quarter after regulatory review and other customary conditions.
Dynatrace will pay about $815 million in cash and issue replacement equity awards to eligible Arize employees, using cash on hand and/or its existing credit facility. Arize founders Jason Lopatecki and Aparna Dhinakaran will join Dynatrace, with Lopatecki continuing to lead Arize.