Data Analytics Platform Databricks said Wednesday it agreed to acquire Neon, a startup that builds an open source alternative to AWS Aurora Postgres for around $1 billion.
Databricks said that once Neon’s technology is acquired, it will combine Startup’s serverless relational database management system with its own data intelligence service to enable AI agents to be deployed more efficiently.
Founded in 2021 by CEO Nikita Shamgunov and software engineers Heikki Linnakangas and Stas Kelvich, Neon offers a managed cloud-based database platform (using free and usage-based paid plans) that allow developers to clone databases and preview changes before production. The platform automatically scales processors, memory and storage depending on usage, supporting branching (isolated database instances for testing and development) and point-in-time recovery.
According to Databricks, these features are ideally suited for workloads run by AI agents that run faster than human developers, but often require supervision to control errors. Citing recent telemetry, the company said 80% of its databases were “neon provisioned by AI agents automatically created not by humans.”
“The age of AI-Native agent-driven applications is restructuring what databases have to do,” said Ali Ghodsi, co-founder and CEO of Databricks in a statement. “Neon proves that. Four of the five databases on the platform are spun by code rather than human. By bringing neon to data bricks, we provide developers with a serverless post-grace that can keep up with Agent Speed, Pager’s economics, and the openness of the post-gress community.”
Neon has raised $109.9 million so far, including Microsoft’s Venture Arm M12, General Catalyst, Menlo Ventures and well-known capital, according to CrunchBase. Databricks has accumulated over $19 billion in funding so far, ending its $15.3 billion funding in January at a $62 billion valuation.
Databricks is not refraining from immersing himself in Warchest as he aims to leverage the AI boom and position himself as a top service to build, test and deploy AI models and agents. The company acquired data management company Tabular for nearly $2 billion last June, and in 2023 it acquired MOSAICML, an open source platform for deploying AI tools, for nearly $1.3 billion.