Hi friends! Welcome back to another installment of our newsletter, we have a lot to fill you in on.

The AI infrastructure layer is consolidating fast. The last six weeks saw a string of M&A deals, record funding rounds, and platform shifts that are redrawing the lines between data, DevTools, and security. Three things jump out: the data infrastructure layer is getting absorbed by larger platforms, developer tooling is reorganizing around agentic workflows, and a new category of "AI governance infrastructure" is taking shape to keep it all in check.

IBM's $11B Confluent acquisition got overwhelming shareholder approval, handing IBM roughly half the event broker and messaging infrastructure market. Fivetran and dbt Labs are merging into a combined ~$600M ARR open data platform (pending regulatory approval). Snowflake picked up Observe, bringing AI-powered observability natively into the data cloud. And Databricks crossed $5.4B revenue run rate at 65%+ YoY growth, shipped Lakebase (serverless Postgres for AI agents), and now pulls $1.4B in annualized AI product revenue. What these all mean is that standalone data tools are getting rolled up into platforms, and the winners are building the substrate for agent workloads.

DevTools had a busy stretch too. JetBrains and Zed co-launched the Agent Client Protocol (ACP) Registry, a curated directory of AI coding agents with one-click install and no vendor lock-in. Cursor joined the registry in early March, making it usable inside IntelliJ and PyCharm alongside its native client. JetBrains also shipped Air in public preview, an agentic dev environment where you delegate tasks to multiple AI agents running concurrently with Docker and Git worktree isolation. GitLab showed off its Duo Agent Platform at its Transcend event. And Pulumi launched a Terraform State Backend in public beta, letting teams store Terraform state alongside Pulumi stacks with zero code changes.

But the most interesting emerging category is governance and security for AI agents. Redpanda shipped an AI Gateway with centralized policy management, observability via OpenTelemetry, and unified auth for agents. Datadog put AI Guard into preview, a real-time security layer that evaluates prompts, responses, and tool calls for agentic apps. OpenAI acquired Promptfoo to secure its enterprise agent platform. And JetStream Security pulled in a $34M seed for AI agent guardrails. The thesis behind that is that building an agent is easy, but running one safely in production is hard. The companies solving that second problem are going to be at the center of how enterprises actually deploy AI.

Funding recently reached historic levels. February 2026 set an all-time record at $189B in global venture funding. Infra-relevant highlights are Cerebras’ $1B round @ $23B valuation, Nscale’s $2B @ $14.6B (largest European Series C ever), Oxide Computer’s $200M for integrated private-cloud racks, Render’s $100M round @ $1.5B riding the vibe coding wave, and WorkOS’ $100M @ $2B for enterprise auth middleware.

The infrastructure layer for the agent era is getting built and consolidated at the same time. The companies laying the governance and security foundations for autonomous agents look like the most compelling infra bet in this cycle.

Torq raised a $140M Series D @ $1.2B to further propel their AI SOC platform to enable full operational autonomy for enterprises and governments. Huge congrats to Ofer, Leonid, Eldad, and the rest of the team. Read more here.

Standard Kernel raised a $20M seed round to build AI systems that can design and optimize the full stack of AI infrastructure, making high-performance systems software adaptive, workload-specific, and continuously improving as hardware and models evolve. Read more here.

LanceDB is being used to give your OpenClaw agent persistent, intelligent long-term memory, but without requiring you to manage any of it. Read more here, or try it out!

Moment.dev just released their desktop app to give agents authentication, collaborative editing, delivery, and access to private APIs in order to create infinite, instant, and completely-personalized software. In a nutshell, they’ll let you run your entire business from a markdown file. Read more here or try it out!

Turso is a complete SQLite drop-in replacement, built for the agentic future. It lets you build agents, AI assistants, and intelligent apps by deploying databases everywhere — on servers, browsers, and devices, just like files. Try it out here!

Here’s our most recent podcast episodes from The Infra Pod with Louis from Openrouter and the Open Source Startups Podcast with Magnus from Browser Use:

ComfyUI was found to be part of Ben Affleck's AI filmmaking company InterPositive, which was just acquired by Netflix last week. InterPositive speaks the language cinematographers and directors already use, and ComfyUI is the infrastructure that keeps creative decisions in the hands of artists, not algorithms. Robin Huang, ComfyUI's Cofounder, put it well:

If you’re not a fit for ComfyUI’s current openings but are passionate about joining innovative AI and software infra startups, check out other exciting opportunities within Essence’s Portfolio.

GTMforDev is back! Essence and Apoorva Pandhi at Zetta Venture Partners are relaunching the series on March 18th with a live podcast featuring CodeRabbit CEO Harjot Gill. We’ll cover GTM strategies, pricing, community-building, and more. We’d love to see you there.

CocoIndex is cohosting a meetup on March 19th in SF all about getting an agent to produce correct output as data changes, memory grows, and systems scale causes deterministic issues. The evening will be about what actually holds up in production: fresh context, durable memory, validation, observability, and guardrails that don’t collapse under real-world pressure. Check it out here.

​Workbrew and Oso are hosting a private dinner during RSA on March 24th for security and IT operators responsible for managing developer tooling across their fleets. This is a practical conversation over dinner with others facing the same challenges adopting AI while managing risk and compliance. Check it out here.

Essence is also co-hosting an evening panel and happy hour on March 25th all about agent identity and autonomous systems during RSA week in SF. Join leaders in identity infrastructure, agent security, and security investing to discuss what changes when software is no longer a static tool. We’d love to see you there.

Thanks for reading! We'll be back next month with more updates.

— The Essence Team