Data analytics platform Databricks has announced its intention to acquire Neon, a burgeoning startup known for its open-source alternative to AWS Aurora Postgres, in a deal valued at approximately billion.
Enhancing AI Deployment with Neon’s Technology
This acquisition is poised to enhance Databricks’ offerings by integrating Neon’s serverless relational database management system with its existing data intelligence services. The synergy aims to facilitate more efficient deployment of AI agents, which are increasingly becoming integral to modern development workflows.
Founded in 2021 by CEO Nikita Shamgunov alongside software engineers Heikki Linnakangas and Stas Kelvich, Neon provides a managed cloud-based database platform that caters to developers with both free and usage-based paid plans. The platform boasts features such as automatic scaling of processor, memory, and storage based on usage, as well as the ability to clone databases and preview changes prior to production deployment. Additionally, it supports branching—creating isolated database instances for testing and development—and offers point-in-time recovery capabilities.
Databricks highlights that these features are particularly well-suited for workloads managed by AI agents, which, while operating at speeds surpassing human developers, still necessitate oversight to mitigate errors. Recent telemetry data indicates that a remarkable 80% of databases provisioned on Neon were generated automatically by AI agents rather than human intervention.
“The era of AI-native, agent-driven applications is reshaping what a database must do,” stated Ali Ghodsi, co-founder and CEO of Databricks. “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 can keep up with agentic speed, pay-as-you-go economics, and the openness of the Postgres community.”
To date, Neon has successfully raised 9.6 million, with notable investors including Microsoft’s venture arm M12, General Catalyst, Menlo Ventures, and Notable Capital. Meanwhile, Databricks has amassed over billion in financing, recently closing a .3 billion funding round at a valuation of billion.
As Databricks continues to leverage its substantial financial resources, it aims to capitalize on the burgeoning AI landscape, positioning itself as a premier service for building, testing, and deploying AI models and agents. The company has made significant strides in this direction, having acquired data management firm Tabular for nearly billion last June and purchasing MosaicML, an open-source platform for training large language models and deploying AI tools, for .3 billion in 2023.
