Databricks buys open-source database startup Neon
Data analytics platform Databricks announced on Wednesday that it had agreed to acquire Neonis a startup that builds an open-source alternative to AWS Aurora Postgres. It was acquired by Databricks for $1 billion. Databricks announced that it would acquire Neon’s technology to combine its serverless relational management system with their own data intelligence services, allowing them to deploy AI agents more effectively.
Neon, founded in 2021 by CEO Nikita Shagunov and software engineers Heikka Linnakangas & Stas Kalvich, offers a cloud-based database management platform (with both free and usage-based plans) that allows developers to preview changes and clone their databases before they are deployed. The platform scales memory, processor, and storage automatically according to usage. It also supports branching, which is a way of creating isolated database instances for development and testing, as well as point in time recovery.
Databricks claims that these capabilities are ideal for workloads run by AI agents. These agents operate faster than humans, but require supervision to prevent errors. The company cited recent telemetry to say that 80% of databases “provisioned by Neon” were created automatically by AI agent rather than by humans.
In a statement, Ali Ghodsi said, “The era AI-native and agent-driven applications are reshaping the requirements of a database.” “Neon is proof of it: four out five databases on the platform are created by code, and not humans. We’re giving Databricks developers a serverless Postgres which can keep up with agentic speeds, pay-as you-go economics, and the openness in the Postgres community. Crunchbase () is a venture capital firm that has investors such as Microsoft’s M12, General Catalyst and Menlo Ventures. Databricks has accumulated over $19 billion of financing and closed a $15.3 Billion financing in January at a valuation of $62 Billion.
Databricks is not holding back on dipping into their war chest to capitalize on the AI boom. It wants to position itself as one of the top services to build, test and deploy AI agents and models. Last June, the company acquired Tabular for a reported $2 billion. In 2023, it will purchase MosaicML for $1.3 billion, an open-source platform for training large language model and deploying AI tools. Ram is a financial reporter and editor. His phone number is
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