Itaú Signs Agreement to Buy AI Startup Newspace for $589 Million, Subject to Approvals

Key Facts

Brazilian bank Itaú said it had signed an agreement to buy all shares in AI startup Newspace in a deal valued at 2.925 billion Brazilian reais, or $589 million, according to Reuters on October 26, 2026. Completion remains subject to regulatory approvals, so the acquisition has not closed. The bank said its collaboration with the company had produced results in areas including credit, customer relationship management and fraud prevention. The deal expands an existing relationship between the parties, as Newspace has provided services to Itaú for about two years. The bank said the agreement directly supports continued development of its generative AI assistant, AI.AI.

According to Reuters, the exchange rate used to calculate the deal value was 4.9654 reais per dollar. The consideration includes a payment upon completion, with the remaining installments deferred over five years under certain conditions, according to Itaú's official filing with the U.S. Securities and Exchange Commission. This structure means part of the deal value will not be paid at closing, while the filing did not specify the initial payment or the deferred installments. Itaú described Newspace as a Brazilian company specializing in developing foundation models trained on large-scale datasets. The bank links its acquisition of these capabilities to applications the two parties have already tested in its banking operations.

Itaú said Newspace's models are trained on the bank's own data and that the company had worked with it for about two years before the agreement was announced. The bank said the results it had observed included credit, customer relationship management and fraud prevention, areas where data analysis is linked to its services and operations. The filing did not detail the extent of improvements in these areas or the collaboration's impact on revenue and costs. The bank also did not announce any immediate changes to existing services as a result of the agreement. Under the announced plan, Itaú will retain Newspace while the company continues to operate and be managed independently.

Itaú said the deal is directly connected to continued development of its generative assistant, AI.AI, which the bank launched to expand the use of artificial intelligence in its services. The assistant was available to about 300,000 people when it was announced in July 2026, with the bank aiming to make it available to all customers by year-end. The service enables natural-language interaction, with uses spanning current accounts, credit, cards, insurance and other services. The bank's technology chief described the goal as turning conversation into a way to understand customers' needs, guide them and support their financial decisions. The deal, through the link the bank announced with the assistant, provides a path to strengthen development of that experience, though the filing did not set a new timetable for launching its features.

Itaú says it began developing its artificial intelligence capabilities in 2024, before announcing the Newspace agreement. As part of this expansion, a case study published by OpenAI said the bank uses an internal platform to process legal documents, containing more than 90 million documents and handling more than two million tasks a month. The study said the platform had delivered efficiency gains ranging from 20% to 80% in stages of legal administration operations. The platform is an earlier example of the bank's use of AI within its operations, while the new deal focuses on a company that develops foundation models and works on banking applications such as credit and fraud prevention. The deal filing did not say that the legal affairs platform or its results were part of the agreement.

Completion of the agreement requires prior approval from Brazil's antitrust authority, known by its acronym CADE, and the Brazilian central bank, in addition to customary closing conditions, according to Itaú's filing. The bank did not give an expected date for completing the approvals or closing the deal. After completion, Newspace's management and operations will remain independent of the bank, with its current team retained. The agreement thus combines the transfer of ownership to Itaú with continued operation of the company and its team under the announced arrangement. The remaining installments of the consideration are deferred over five years after completion, subject to the conditions set out in the filing.