Databricks has made quite a splash by making known its agreement to acquire Neon, an open-source database startup, for about $1 billion. Nikita Shamgunov, Heikki Linnakangas, and Stas Kelvich started Neon in 2021. Founded in 2021, the company has quickly shot to fame for their unique managed cloud-based database platform, which includes free and usage-based paid plans.
Neon’s open, serverless platform gives developers the flexibility they need to focus on building value, not managing databases. It has functionality that allows them to clone databases and preview changes before pushing them into production. Incredibly, AI agents generate 80% of the repositories on Neon’s platform without human intervention. So manually create their task—well developers would much rather work on development. This trend has been exacerbated by the surging demand for AI-native applications, which have quickly become all the rage in the tech sector.
To date, Neon has raised $129.5 million from an impressive list of investors. This significant backing features investments from Microsoft’s venture arm M12, General Catalyst, Menlo Ventures and Notable Capital. The platform has become a highly regarded open-source alternative to AWS Aurora Postgres. It’s a magnet for developers who demand flexibility and scalability with their database solutions.
Ali Ghodsi, co-founder and CEO of Databricks, underscored the importance of this acquisition with the growing technological demand in mind. He stated,
“The era of AI-native, agent-driven applications is reshaping what a database must do.”
That acquisition continues the story of Databricks’ long-term efforts to boost its data management offerings. Earlier this year, the company acquired MosaicML for $1.3 billion, an open-source platform dedicated to training large language models and deploying AI tools. Further complementing its position in the data management solutions space, last June, Databricks acquired Tabular for close to $2 billion.
“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.”
As the technology landscape continues to change, Neon’s integration into Databricks will further empower developers to unleash their creativity and solve real-world problems. This change comes in direct response to the increasing demand for AI powered applications. The acquisition is an exciting testament to both companies’ shared commitment to innovation in the rapidly evolving cloud database technology landscape.
As the technology landscape evolves, the integration of Neon into Databricks is expected to enhance the capabilities available to developers while responding to the increasing reliance on AI-driven applications. The acquisition reflects both companies’ commitment to innovation in cloud database technology.