Databricks has agreed to acquire Neon, a significant player in the serverless Postgres market, to enhance its database capabilities and developer experience. Over 80 percent of databases on Neon are automatically created by AI agents, indicating a shift towards agent-driven workflows. Neon's architecture allows for rapid deployment of Postgres instances in under 500 milliseconds, features a cost structure that scales with usage through the separation of compute and storage, and is fully compatible with the Postgres ecosystem. The acquisition aims to eliminate inefficiencies in database scaling, improve performance for concurrent AI agents, and streamline infrastructure while maintaining security and governance. Following the acquisition, Neon's team will join Databricks to support the development of responsive and reliable AI agent systems.