Introduction Of Databricks
Databricks has announced its acquisition of Neon, a cloud-native database startup, in a deal valued at approximately $1 billion. The strategic move strengthens Databricks’ position in the AI-driven data infrastructure space by integrating Neon’s innovative serverless Postgres database into its own data intelligence ecosystem.
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Neon, founded in 2021 by Nikita Shamgunov along with software engineers Heikki Linnakangas and Stas Kelvich, has built a fully managed, cloud-based platform that offers serverless scaling and advanced developer capabilities like database cloning, branching for isolated testing environments, and point-in-time recovery. These features are particularly aligned with the demands of AI applications, which often require dynamic, fast-scaling infrastructure.
Databricks emphasized that Neon’s technology is well-suited to AI agent workloads — automated processes that create and manage data environments faster than human developers. According to telemetry shared by the company, 80% of databases provisioned on Neon were initiated by AI agents rather than human users.
Ali Ghodsi, Databricks’ co-founder and CEO, highlighted the shift toward AI-native development. “The era of AI-native, agent-driven applications is reshaping what a database must do,” he said. “Neon proves it: four out of every five databases on their platform are spun up by code, not humans. By bringing Neon into Databricks, we’re giving developers a serverless Postgres that matches the speed of agents, with flexible economics and open-source compatibility.”
Backed by over $129 million in funding from major investors such as M12 (Microsoft’s venture arm), General Catalyst, Menlo Ventures, and Notable Capital, Neon positioned itself as a strong alternative to traditional cloud databases like AWS Aurora Postgres. Its open-source roots and developer-friendly model attracted early adoption and enthusiasm.
Databricks, which has raised more than $19 billion to date and was most recently valued at $62 billion, has been actively expanding its capabilities to support AI development. The Neon acquisition follows its earlier purchases of MosaicML ($1.3 billion) and Tabular (reportedly nearly $2 billion), as it seeks to offer a comprehensive platform for building, training, and deploying AI models and agents.
By integrating Neon’s scalable, AI-friendly database technology, Databricks is doubling down on its vision of a modern, unified platform for data and AI — one that empowers developers to innovate faster in an increasingly autonomous computing world.
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