AI agent company Decagon held early M&A talks with ServiceNow, others

• AI startup Decagon builds AI agents to automate customer support for enterprise customers.
• The company has hired an investment bank to evaluate M&A interest.
• The discussions with potential buyers, including software company ServiceNow, are in the early stages.

Buzzy AI agent startup Decagon could be the latest company swept up in a growing wave of AI dealmaking.

The company, which was last valued at $4.5 billion earlier this year, has hired a bank to evaluate acquisition interest, according to people familiar with the matter.

Decagon has held early discussions with cloud software giant ServiceNow and additional companies, the people said. If a deal does not materialize, Decagon could instead raise a new funding round.

The interest in Decagon represents a new shift in the AI boom: after years of huge venture rounds and soaring valuations, tech companies are increasingly looking to buy their way into promising AI markets. Hugging Face was recently acquired by Nvidia for 12.9 billion, and OpenRouter was snapped up by Stripe for around $8 billion.

Growing AI-related businesses are often getting offers at a significant premium to their last valuation, so if Decagon were to accept an offer, it could be considerably higher than its previous $4.5 billion value.

Founded in July 2023 by Jesse Zhang and Ashwin Sreenivas,, Decagon uses generative AI to automate customer support for enterprise customers, including Delta, Snapchat and Ticketmaster. The company has raised over $400 million from a roster of well-known Silicon Valley investors, including Andreessen Horowitz, Index Ventures, Bain Capital Ventures, and Accel. It competes with industry veteran Bret Taylor's Sierra, which was valued at $15.8 billion earlier this year.

A deal would also come as ServiceNow looks to reassure investors that it can adapt to AI’s threat to traditional software businesses. Its shares tumbled earlier this year during the so-called SaaS-pocalypse, when investors feared AI could erode software companies’ profit margins.

It was also punished for making a $7 billion acquisition of the security business Armis, a deal announced late last year. The stock has since rebounded as ServiceNow continues to invest heavily in AI and reshape parts of its business.