Brick by brick

Brick by brick, Databricks acquires a lead in the AI-first data platform race.

Databricks just acquired Neon, marking it's third $1B+ acquisition in just under two years. Neon emerged as a clear a leader amongst AI-native database startups. In fact, Neon is such a clear leader that BOTH Databricks's and Snowflake's corporate venture arms invested in their 2023 Series B.

The acquisition intensifies the competition between Snowflake and Databricks, with both companies now offering increasingly comprehensive solutions but with different architectural approaches and strengths. While Snowflake continues to excel in ease of use and analytics performance, Databricks is building a comprehensive AI-first data platform that may be more appealing as AI and agentic workloads become increasingly central to enterprise data strategies. With Neon, Databricks further strengthens its full-stack, AI-first offering.

Will Snowflake acquire one of the remaining AI-native database startups to boost their competitive position in the AI arms race?

*Interesting footnotes*

1) Databricks and Snowflake have 8 overlapping CVC investments including dbt Labs, Tecton, Hunters, Hex, Voyage AI, theom, Mistral AI, and Neon

2) Databricks and Snowflake have now made 15 acquisitions each

3) Neon is the 2nd company to be acquired by Databricks that received funding from its Databricks Ventures fund (Arcion). Snowflake has acquired 1 company (Samooha) backed by its CVC arm.