Databricks to buy open-source database startup Neon for $1B

Data analytics level Databricks said connected Wednesday that it has agreed to get Neon, a startup gathering an unfastened root alternate to AWS Aurora Postgres, for astir $1 billion.

Databricks said acquiring Neon’s tech would fto it harvester the startup’s serverless relational database absorption strategy with its ain information quality services to fto its customers deploy AI agents much efficiently.

Founded successful 2021 by manufacture seasoned CEO Nikita Shamgunov, bundle engineers Heikki Linnakangas and Stas Kelvich, Neon offers a managed cloud-based database platform (with escaped and usage-based paid plans) that lets developers clone databases and preview changes earlier they spell to production. The level automatically scales processor, representation and retention according to usage, and supports branching — isolated database instances for investigating and improvement — arsenic good arsenic point-in-time recovery.

Those capabilities, Databricks says, are ideally suited to workloads tally by AI agents, which run faster than quality developers but often necessitate supervision to power for errors. Citing caller telemetry, the institution said 80% of the databases “provisioned connected Neon were created automatically by AI agents alternatively than by humans.”

“The epoch of AI-native, agent-driven applications is reshaping what a database indispensable do,” said Ali Ghodsi, co-founder and CEO of Databricks, successful a statement. “Neon proves it: 4 retired of each 5 databases connected their level are spun up by code, not humans. By bringing Neon into Databricks, we’re giving developers a serverless Postgres that tin support up with agentic speed, pay-as-you-go economics and the openness of the Postgres community.”

Neon has truthful acold raised $129.5 million, according to Crunchbase, and its investors see Microsoft’s task limb M12, General Catalyst, Menlo Ventures, and Notable Capital. Databricks, for its part, has truthful acold accumulated much than $19 cardinal successful financing, and successful January closed a $15.3 cardinal financing astatine a $62 cardinal valuation.

Databricks hasn’t held backmost from dipping into its warchest arsenic it seeks to capitalize connected the AI roar and presumption itself arsenic a apical work to build, trial and deploy AI models and agents. The institution past June acquired information absorption institution Tabular, reportedly for astir $2 billion, and successful 2023 bought MosaicML, an open-source level for grooming ample connection models and deploying AI tools, for $1.3 billion.