AI unicorn Mercor acquires Deeptune after founder Brendan Foody backed the startup

Brendan Foody started Mercor when he was 19 years old. Now he’s 23, worth billions on paper, and running one of the fastest-growing companies in AI history. On Thursday, his $10 billion business acquired startup Deeptune, a company Foody quietly helped fund months before buying it, Fortune learned exclusively.

Deeptune, an Andreessen Horowitz-backed startup, builds simulation environments where AI agents practice real-world tasks before touching production systems—think a flight simulator, but for AI agents learning how to use Excel, Salesforce, and Slack. Financial terms weren’t disclosed. And according to Mercor, Deeptune’s team will be relocating to New York.

Foody was listed as an angel investor in Deeptune’s $43 million Series A just three months before the acquisition closed. Foody told me the angel check was written with acquisition already in mind: “It was in a lot of ways the main motivation, actually.” Call it relationship-building or call it a strategic hold. Either way, a16z funded Foody’s future acquisition target, and Foody got a front-row seat before making his move.

The deal is also a direct answer to where the AI training market is heading. Frontier labs (and Mercor customers) like Anthropic and OpenAI now need full digital replicas of enterprise software environments where their agents can practice, fail, and learn. Mercor’s network of more than five million domain experts already builds the tasks and scoring rubrics that tell a model whether it did the job right. Deeptune builds the apps those tasks run inside. Together, they cover the full stack.

Foody claims Mercor is already the market leader in building these so-called reinforcement learning environments—and that all of the Mag Seven except Tesla are customers. The company hit $2 billion in ARR in June, up from $1 billion last year. Foody described the jump as “the fastest growth trajectory ever” from $1 million to $2 billion ARR in 24 months.

Mercor’s acquisition comes on the heels of a massive data breach in March. Hackers exploited a supply chain vulnerability in LiteLLM—an open-source Python library widely used to build AI tools—and exfiltrated an estimated four terabytes of Mercor’s data. This included contractor Social Security numbers, passport scans, interview recordings, facial biometrics, and internal records revealing how Anthropic labels safety data and how Meta builds reinforcement learning pipelines. The hacking group Lapsus$ claimed responsibility and offered the data for sale on Telegram. A class action was filed in April against Mercor in California. 

Foody spoke about the breach like a thing of the past, with the confidence of someone whose customers already voted with their wallets: “Every frontier lab has expanded their relationship with us since the data breach,” he claimed. “The business grew from a $1 billion revenue run rate to $2 billion in ARR in the last four months.”

That’s either a remarkable display of customer loyalty or a reminder that Frontier Labs has nowhere else to go at this scale. 

See you tomorrow,

Lily Mae Lazarus
X: @LilyMaeLazarus
Email: lily.lazarus@fortune.com
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This story was originally featured on Fortune.com