Databricks is opening their wallets again. The San Francisco-based data analytics startup announced Wednesday it had acquired Neon, a serverless database startup, in transactions worth around $1 billion.
The move is intended to make it easier for developers and businesses to build AI agents. This is a software program that can handle tasks such as writing code or sending emails without constant human input.
“We look forward to announce that we have agreed to acquire Neon, a developer-first serverless post-gress company. The Neon co-founder is one of the very few people in the world who can reorganize post-glass with a true separation of storage and computing built for modern developers and AI systems.
The acquisition news comes less than a month after Databricks announced it would launch an AI investment of $250 million to increase India’s workforce by more than 50%, aiming to drive its personnel with more than 750 employees by the end of the fiscal year.
Databricks buys neon in a billion dollar deal to power AI agents using serverless PostgreSQL
Neon brings a cloud-native platform to the table, built on PostgreSQL, a popular open source database. The idea is simple. It provides developers and AI agents with a way to access and manage faster, more flexible ways in real time. This allows for smoothing what many friction companies face when deploying AI-driven applications.
“By bringing neon to Databricks, we offer developers a serverless post-grace that allows developers to keep up with agent speed, pay-as-you-go economics and the openness of the post-gress community.”
Founded in 2021, Neon has already integrated with celebrities like Vercel, Replit, CloudFlare, GitHub, Microsoft, and more, making it easy for developers to connect to familiar tools and workflows.
After the deal is over, the neon team will join Databricks. We were not given a timeline as to when that would happen. “This acquisition gives us the scale and support to accelerate our mission,” the Neon founder said in a blog post.
Databricks last raised $10 billion at a $62 billion valuation, but there is clearly a buying streak. Last year it took up generative AI startup MosaicML in a $1.3 billion stock trading, and later scooped up data management startups for over $1 billion.
The company says more than 10,000 organizations, including Comcast, Block, Rivian and Shell, are using their data intelligence platform to narrow down complex data and build AI applications.
Neon fits perfectly with that strategy, and adding Databricks’ work will help developers build smarter tools without getting lost in their infrastructure.
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