Sridhar Vembu shares bizarre startup acquisition pitch leaking rival offer. AI takes the blame later

Sridhar Vembu recalled an incident on Friday where a startup made an acquisition request to Zoho, mentioning an offer from another company. Later, an AI agent corrected the email, admitting it disclosed confidential discussions by mistake.

In a post on the social media platform X, Vembu wrote, “I got an email from a startup founder, asking if we could acquire them, mentioning some other company interested in acquiring them and the price they were offering.”

He added, "Then I received an email from their "browser AI agent" correcting the earlier mail saying “I am sorry I disclosed confidential information about other discussions, it was my fault as the AI agent.”

Vembu experienced one of the several incidents that have reportedly been caused by the use of AI. With the widespread use of AI across industries and everyday applications, several users have often flagged different types of errors. These include factual incorrectness, sharing more information than what is actually asked for, biased outputs, misreading context, inconsistent results and many more. These concerns highlight that, although AI tools have become increasingly common, they still require human oversight to ensure reliability.

What do netizens say?

Several social media users have reacted to Vembu's post, with most of them raising concerns over errors generated by AI tools.

One of the users wrote, “This is exactly why AI agents need guardrails. One slip, and suddenly the ‘helper bot’ is leaking acquisition terms. We’re entering a phase where AI won’t just draft emails — it’ll accidentally start negotiations.”

Another user took a funny jibe and said, “If you were also using an AI agent, all conversations will be between agents only and mistakes will remain between agents if agents were forgiving within their fraternity 😄.”

Meanwhile, a user refused to believe that the incident was an AI error and said, “This is not AI, this is an old school method of business.”

Another user wrote, “Looks like the AI has better etiquette than the human founder 😄. Next thing we know, it’ll be negotiating the term sheet too!”

A user said, “This is exactly the new kind of chaos AI is introducing into business communication.”

Another user flagged, “We’ve officially entered the era where, Humans negotiate, AI accidentally spills the deal terms and then AI tries to clean up the mess. It’s funny, but also a reminder. AI can assist in communication, but it can also miscommunicate, over-share, or break confidentiality if not properly controlled.”