Dynatrace, the leading AI-powered observability platform, has signed a definitive agreement to acquire Arize in a cash-and-stock transaction valued at $915 million. Together, Dynatrace and Arize will enable customers to evaluate, operate and continuously improve AI applications from development through production at scale.

AI observability spans the full lifecycle of an AI application, from experimentation and evaluation before release to tracing how LLMs, agents and orchestration layers behave in production. It connects that behavior with application performance, GPU utilization, infrastructure health and business processes.

AI observability delivers the insights AI engineers, developers, SREs and platform teams need to debug and optimize AI behavior and keep AI-powered services accurate, reliable and cost-efficient. It is also one of the fastest-growing categories in observability, projected to exceed $10 billion by 2030, and is central to Dynatrace’s growth strategy.

Rick McConnell, CEO, Dynatrace says, “AI is now moving into production at incredible speed, and the resulting AI observability market opportunity is enormous. Dynatrace anticipates customers’ needs at critical inflection points, and this is one of the most significant in our history. Acquiring Arize advances our AI observability leadership, accelerates our roadmap, enhances our long-term growth profile, expands our reach with the developer community, and adds an incredible AI-first team to Dynatrace.”

Today, AI software delivery is fragmented. AI engineering teams evaluate model and agent behavior in one set of tools, while the teams running the applications and infrastructure beneath them work in another. There is often no shared system connecting how an AI application is evaluated to how it behaves in production. As a result, when output quality slips or a customer transaction fails, the cause can sit anywhere from the prompt to the infrastructure, with little feedback reaching developers.

Also Read: Beyond Search: Google's Agentic AI Vision Takes Center Stage at I/O

Dynatrace’s acquisition of Arize will eliminate that fragmentation and provide end-to-end observability from development to production.

Arize is the category leader in AI observability, purpose-built for AI and agents and trusted by Fortune 500 enterprises and AI-native builders alike. Arize combines a strong developer brand and thriving open-source community with the enterprise-grade frameworks that teams need to detect hallucinations, measure output quality and continuously validate AI behavior.

Also Read: The Rise of Deep Tech in India: Why India Must Play the Long Game

It is the only platform that is simultaneously OSS-native and stack-agnostic across every major AI framework and model provider. This makes Arize a clear choice for developers across the AI lifecycle.

Also Read: India's Deep-Tech Revolution: 10 AI Startups Driving Innovation

Jason Lopatecki, CEO, Arize says, “We founded Arize because AI teams needed a way to know their agents were actually working correctly, not just running. Joining Dynatrace will enable us to take that mission much further. Together, we can bring AI evaluation and software observability into an end-to-end system, enabling teams to build more ambitious AI applications faster. This is the kind of innovation that only happens when two companies with highly complementary solutions and go-to-market models come together, setting a new bar for what AI observability can deliver for the entire industry.”