Dynatrace has entered into a definitive agreement to acquire AI observability leader Arize for approximately $915 million. The cash-and-stock transaction will provide customers with a new environment that integrates evaluation and operations across the entire AI lifecycle.
Dynatrace has entered into a definitive agreement to acquire Arize, a provider of AI-driven observability, for approximately $915 million in cash and stock. The transaction is expected to close in the latter part of this quarter or around the beginning of Dynatrace's third quarter, subject to regulatory review and other conditions.
Following the acquisition, Dynatrace will provide automated feedback loops spanning the entire AI lifecycle, from development through production. This will create integrated context linking the evaluation of AI models and agents with application performance, infrastructure health and business outcomes. Arize's technology is also expected to support enterprise data platforms and AI lakehouse capabilities.
Arize's founders said that joining Dynatrace would enable them to advance AI team evaluation and ecosystem integration. Through collaboration between the two companies, they aim to create a new industry standard that integrates AI evaluation and software observability end to end.
Financially, the transaction is expected to increase fiscal 2027 ARR growth by approximately 200 basis points, while diluting non-GAAP operating margin by approximately 175 basis points. The transaction is expected to be funded with cash on hand and existing credit facilities, and an Arize co-founder will join Dynatrace at closing.