Databricks Inc. is reportedly in advanced discussions to acquire Neon Inc., a startup that specializes in a commercial version of the open-source PostgreSQL database. According to sources cited by the tech publication Upstarts Media, some insiders are expressing confidence that the deal is nearly finalized, while others remain cautious about the potential for it to fall through. The acquisition is anticipated to exceed billion.
Neon, based in San Francisco, has successfully raised over 0 million in funding, with notable contributions from Microsoft Corp’s M12 fund among other investors. The standout feature of Neon’s PostgreSQL distribution is its serverless architecture, which alleviates the burden of infrastructure management from customers.
The platform is designed to dynamically adjust hardware resources in response to varying workload demands. This capability allows for separate provisioning of storage and processing power, a significant advantage over traditional database environments where both must be scaled together, often leading to unnecessary expenditures on hardware.
One of the challenges faced by applications when accessing databases is the establishment of network connections, which can consume valuable hardware resources and degrade performance. Neon’s PostgreSQL implementation addresses this issue through an innovative connection pooling feature. This technology maintains a set of standby connections that can be quickly allocated to applications, thereby minimizing the resource drain associated with creating new connections.
As a relational database, PostgreSQL organizes data in rows and columns. Neon enhances its offering with a robust cybersecurity tool that enables organizations to control user access at a granular level, down to individual rows. In the event of data loss due to user error or ransomware attacks, administrators have the capability to revert the database to a previous state.
Databricks’ interest in Neon may stem from the latter’s suitability for artificial intelligence applications. Neon’s architecture supports the storage of vectors, the mathematical constructs that AI models utilize to retain information. Additionally, the platform can provision new database instances in as little as one second, a feature that is particularly beneficial for AI coding assistants. The quicker a coding assistant can deploy a database in response to a developer’s request, the more efficient its performance will be.
Over the past two years, Databricks has actively pursued acquisitions to enhance its AI capabilities. Recently, the company acquired Fennel AI Inc., which specializes in creating data pipelines—automated workflows that supply AI applications with necessary data. Earlier acquisitions included Lilac AI Inc., focused on AI dataset management, and MosaicML Inc., a developer of large language models, with the latter transaction reportedly valued at .3 billion.
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Image: Neon
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