Data analytics company Databricks has announced its acquisition of cloud database software provider Neon for approximately $1 billion. This marks Databricks' latest significant transaction, having previously acquired AI model training startup MosaicML for $1.3 billion in 2023 and data optimization startup Tabular for over $1 billion last year.
Neon, with over 18,000 clients, is recognized as an alternative to Amazon Web Services' Aurora Postgres database service. Its open-source PostgreSQL database dates back to the 1980s and has attracted a multitude of developers. Key clients include OpenAI, Adobe (ADBE, Financial), and Boston Consulting Group.
Google (GOOGL) and Microsoft (MSFT) also offer options for running PostgreSQL databases. Databricks provides software that assists in data cleaning, executing queries, and running AI models, with Microsoft, Snowflake (SNOW), and Databricks themselves having invested in Neon.
Founded by ex-Meta and Microsoft engineer Nikita Shamgunov, Neon charges based on computing and storage usage per customer and can run on both Amazon and Microsoft's clouds. Databricks, headquartered in San Francisco, was valued at $62 billion during a $10 billion funding round announced in December, part of which was allocated for acquisitions.
