Databricks acquired the privately held serverless PostgreSQL startup Neon for approximately billion. Neon, founded in 2022, had previously raised million in a Series B funding round. Over 80% of the databases generated on Neon's platform were initiated by AI agents. PostgreSQL, an established relational database platform, is ranked as the fourth most popular database as of 2025. Serverless PostgreSQL offers operational simplicity, allowing on-demand resource allocation, which is particularly beneficial for AI-centric projects. Major cloud providers, including Google, Microsoft, and AWS, offer serverless PostgreSQL services. Databricks aims to build a developer and AI-agent-friendly database platform with this acquisition. Serverless architectures excel in handling short bursts and smaller workloads, providing rapid scalability, but may present challenges in data management. Neon’s model enhances appeal for developers by distinguishing between storage and compute, facilitating automated scaling. The acquisition indicates a shift in infrastructure requirements for successful AI implementation, highlighting the need for flexible, instantly scalable serverless solutions.