Databricks secured $10 billion in Series J funding, which sets the company valuation at $62 billion. Thrive Capital led the round, while Andreessen Horowitz, DST Global, GIC, Insight Partners, and WCM Investment Management co-led. New participants include ICONIQ Growth, MGX, Sands Capital, and Wellington Management. This capital follows the October close of the Mosaic AI acquisition, a transaction worth $1.3 billion once it accounts for employee retention packages. I see this cash pile as a way to defer an IPO while funding expansion into new markets. Databricks serves over 10,000 global customers, which includes more than 70% of the Fortune 500. The company expects to cross a $3 billion revenue run rate in the fourth quarter that ends on January 31, 2025. The Mosaic AI platform provides the tools to build, own, and secure generative AI models. This acquisition integrates the MosaicAI research team to help customers train models on their own data. The company previously raised $500 million in a Series I round at a $43 billion valuation. This latest round follows a $1.6 billion Series H in 2021 which set the valuation at $38 billion. The founders, including Ali Ghodsi, continue to push the Data Intelligence Platform to help companies find and treat diseases or detect financial fraud. The Series I round included chip-maker Nvidia, Capital One Ventures, and Ontario Teachers’ Pension Plan. Existing investors like Fidelity Management & Research Co. and Tiger Global also participated.
The Snowflake rivalry
The competition between Databricks and Snowflake grows as Databricks expands its scale. While Snowflake maintains a revenue run rate of roughly $5.5 billion with 32% growth, Databricks projects an annualized revenue run rate exceeding $6.9 billion in the first half of fiscal 2027. This equals 65% year-over-year growth in the core business. Databricks’s valuation now nearly doubles Snowflake’s $94 billion market capitalization from July 2026. I find the shift of enterprise users toward the Databricks Lakehouse for generative AI training undeniable. Snowflake recently added Select Star to its Horizon platform to provide metadata-driven lineage and data discovery on objects outside its boundary. This move attempts to counter the growing preference for the Databricks unified data and AI platform. Databricks also maintains a presence in the data warehousing market with its SQL Warehouse product, which surpassed a $1.5 billion revenue run rate.
| Entity | Valuation/Market Cap | Revenue Run Rate | Core YoY Growth |
|---|---|---|---|
| Databricks | $62 billion | $6.9 billion (projected) | 65% |
| Snowflake | $94 billion | $5.5 billion | 32% |
The cost of AI
The $62 billion valuation demands aggressive growth. Databricks needs to maintain high revenue increases because the market expects it to dominate the AI agent space. I think the company’s massive expansion into international hubs like London and Singapore will hurt its margins. Users should expect a move from free features to metered, consumption-based models for new AI capabilities. For instance, Databricks uses the Mosaic AI technology to enable organizations to build and secure generative AI models. You should prepare for new line items in your budget as the platform expands. Databricks currently has over 500 customers that consume more than $1 million in annual revenue run rate according to its latest reports. The company intends to use its capital for new AI products, acquisitions, and expansion of its international go-to-market operations. The company’s growth exceeded 60% year-over-year in the third quarter that ended on October 31, 2024. The MosaicAI team continues to work on models like MPT-30B for customers like Replit and Hippocratic AI. Will the company maintain its momentum as it targets the $3 billion revenue mark?
