Data and Artificial Intelligence (AI) company Databricks has acquired database startup Neon.
“As a brace for the $100 billion-plus database market for the unprecedented disruption driven by AI, Databricks plans to continue innovating and investing in Neon’s database and developer experience for existing and new neon and partners.”
The company did not list dollar amounts for the acquisition, but a Wall Street Journal (WSJ) report valued the transaction in about $1 billion.
Databricks has released what AI agents are becoming increasingly important to modern developers, adding that Neon is “dedicated to supporting agent workflows.”
Recent in-house telemetry has shown that over 80% of neon-provisioned databases are automatically created by AI agents rather than humans, highlighting the explosive growth of agent workloads.
“The age of AI-Native for agent-driven applications is restructuring what databases have to do,” said Ali Ghodsi, co-founder and CEO of Databricks, in the release.
“By bringing neon to Databricks, we provide developers with serverless post-grace that allows developers to keep up with agent speed, pay-as-you-go economics and the openness of the post-gress community.”
Speaking to WSJ, Ghodsi said “almost every customer we have wants to take advantage of our agents.” However, these agents need to be able to build new databases to support what they do, where neon comes in.
Databricks was valued at $62 billion earlier this year in the Series J funding round, earning $10 billion in equity funding and $5.25 billion in credit facilities from several bank giants.
Meanwhile, PYMNTS wrote this week about the rise of Agent AI web experiences, claiming that “we can mark a transformational period of time in the way users access and interact with online information.”
At the heart of this potential evolution are large-scale language models (LLMs), such as Openai’s GPT-4, Google’s Gemini, and Humanity’s Claude.
These systems will allow you to understand the context, maintain memory and perform multi-step tasks. Still, true agents need integration, not just language skills. The Application Programming Interface (API) now acts as a conduit that allows AI agents to interact with apps, services, and devices.
“For businesses, Agent AI presents a double-edged sword,” the report states. “On the one hand, it could open new paths for customer engagement, operational efficiency and product innovation, while on the other hand, it could disrupt long-standing business models.”
