The deals pipeline has been pretty dry lately. But sometimes, there are unexpected deal opportunities that present themselves and both buyer and seller seize the moment. Take for instance a chance meeting between two CEOs, who have a lot in common, and that resulted in a blockbuster A.I. deal.

That’s the story my finance colleague Luisa Beltran tells in her exclusive piece, “Databricks wasn’t looking to buy, and MosaicML wasn’t selling. How two CEOs navigated a blockbuster $1.3 billion A.I. deal.”

“Two founders—Ali Ghodsi, 44, the chief executive of Databricks, and Naveen Rao, 48, MosaicML’s CEO—met, realized they have lots in common, and in warp speed came to combine their companies,” Beltran writes. “Databricks is a data-analytics company that employs more than 5,500 people and was valued at $38 billion in 2021. MosaicML, by comparison, was launched two years ago, has 62 employees.”

Although the company sizes are different, the two had the same goal in mind. “They wanted to democratize A.I. and enable lots of people to have access to these models,” Beltran writes. “But both knew security was a big issue for their customers, and neither was interested in building a consumer app.”  

Ghodsi and Rao knew of each other for a long time but didn’t actually meet in person until they both attended the Cerebral Valley conference, an A.I. summit in San Francisco on March 30 that included some of the biggest names in the industry. 

A conversation during a VIP dinner after the conference laid the foundation for a potential deal between Ghodsi and Rao.

“The meeting piqued Ghodsi’s interest,” Beltran writes. “Rao is very well-known in the A.I. community, having sold his first company, Nervana Systems, to Intel in 2016 for $408 million. When he left four years later, in 2020, Rao was Intel’s top A.I. executive. But in late March, Databricks wasn’t necessarily looking to buy anything and MosaicML was definitely not interested in selling, Ghodsi said.”

You can read more here about how Ghodsi and Rao eventually changed their minds, and the ins and outs of a complicated deal that came together in less than two months. 

I recently had a conversation with Neil Dhar, PwC’s vice chair and U.S. consulting solutions co-leader, about the state of M&A. “I’d say right now, CEOs and dealmakers are looking at any path to grow, make their companies more efficient, and balance that with risk,” Dhar told me. 

He shared four key trends likely to drive M&A in the coming months, like the necessity for business reinvention. More companies are using deals to transform business models and respond to an evolving marketplace, such as increasing digital capabilities and A.I., expanding supply chains, or incorporating ESG into their portfolios, Dhar explained. 

And sometimes, all it takes is a chance meeting to spark a deal that may change the trajectory for both the buyer and the seller.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

Kyriba’s Currency Impact Report details the impacts of foreign exchange (FX) exposures among 1,200 multinational companies based in North America and Europe with at least 15% of their revenue coming from overseas. In the first quarter of 2023, the combined pool of corporations reported $22.52 billion in FX-related headwinds and $0.68 billion in tailwinds, according to the report. North American companies reported $21.24 billion in headwinds.

Going deeper

"Empty spaces and hybrid places: The pandemic’s lasting impact on real estate," a new report by McKinsey Global Institute, examines the ripple effects of hybrid work on real estate. "Untethered from their offices, residents have left urban cores and shifted their shopping elsewhere," according to McKinsey. For instance, from mid-2020 to mid-2022, New York City’s urban core lost 5% of its population, and San Francisco’s lost 6%, the research found.

Leaderboard

Alexis DeSieno was named CFO at Cardlytics, Inc. (Nasdaq: CDLX), an advertising platform. DeSieno brings nearly 20 years of experience in a wide range of finance and data functions, most recently as SVP of finance at Clear Secure, Inc. Before that, she held various finance roles at SoulCycle Inc. and the Estée Lauder Companies, Inc. DeSieno also has over a decade of experience on Wall Street, most recently in global investment banking at Bank of America.

Arvind Bobra was named CFO at Lessen, a tech-enabled, end-to-end solution for outsourced real estate property services. Bobra most recently served as SVP of finance at Axon Enterprise (Nasdaq: AXON), where he led financial planning and analysis, product finance, commercial finance, and treasury. In his eight-year tenure at Axon, Bobra served in a variety of finance roles, including investor relations, and built several functions and processes that helped scale the company. Before Axon, Bobra spent five years as director of finance and business development at Ferroglobe PLC (formerly Globe Specialty Metals). He began his career at Lazard LLC in mergers and acquisitions.

Overheard

“Early growth was off the charts, but more importantly 10s of millions of people now come back daily. That’s way ahead of what we expected. The focus for the rest of the year is improving the basics and retention. It’ll take time to stabilize, but once we nail that then we’ll focus on growing the community. We’ve run this playbook many times (FB, IG, Stories, Reels, etc) and I’m confident Threads is on a good path too.”

—Meta CEO Mark Zuckerberg took to Threads (a social media platform designed by Meta that competes with Twitter) on Monday to express his optimism about the platform. The number of daily active users on Threads has dropped from 49 million to 23.6 million in a week, according to a study from data-tracking site SimilarWeb, Fortune reported. That means people who were quick to sign up aren’t coming back regularly. The app was launched on July 5.