C3.AI in Talks to Merge with Startup Automation Anywhere
The Takeaway
- C3.AI in talks to merge with startup Automation Anywhere, which would go public
- C3.AI market cap slid to $1.7 billion, a tenth of its valuation six years ago
- Automation Anywhere would go public via merger, gaining AI automation capabilities
C3.AI, founded by tech industry veteran Thomas Siebel, is in talks to merge with privately held startup Automation Anywhere, which will effectively go public in the deal, according to people familiar with the discussions.
C3.AI, which sells AI to large companies and government agencies, was the first branded AI stock when it went public in 2020. It has struggled for several years amid the rise of generative AI and its market cap has slid to $1.7 billion, a tenth of its valuation six years ago. Automation Anywhere, a rival to UiPath, develops software for automating repetitive tasks inside businesses. If the deal materializes, Automation Anywhere would buy C3.AI and go public as a result, the people said.
A combination with C3.AI could give Automation Anywhere more AI automation capabilities across different sectors. In November, it agreed to buy Aisera, a startup that sells AI automation tools for back-offices like IT services, human resources and customer service.
The price of the deal couldn’t be learned. Both companies may decide not to go ahead with it, and Automation Anywhere could still opt to go public in a more traditional way. Representatives from the companies declined to comment.
Automation Anywhere was valued at $6.8 billion in 2019 by private investors. Its recent valuation couldn’t be learned.
C3.AI products help financial services firms flag fraudulent transactions and assist oil and gas companies in identifying locations for drilling. It counts Shell, U.S Air Force as some of its customers.
Automation Anywhere was founded in 2003 under the name Tethys Solutions. Companies providing automation software services have come under pressure from newer generative AI tools since ChatGPT launched in 2022. UiPath’s shares have fallen 80% since 2021.
However, more recently, these automation software companies have touted their ability to complement the large language model providers to handle complex workflows with less errors and have rebranded themselves as agentic process automation companies.
Shares of C3.AI have also sunk as competitors, including major cloud providers, flooded the market with similar products and began targeting the same set of customers.
The sell-off accelerated after Siebel said he would step down from the CEO role in July. Siebel said he was diagnosed with an autoimmune disease earlier this year that resulted in “significant visual impairment.” He remained as executive chairman of the company.
In November, C3.AI began working with investment bankers after receiving takeover interest, according to the people.