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Databricks Acquires Neon for $1 Billion to Expand AI-Driven Data Infrastructure

The acquisition integrates Neon's serverless Postgres database capabilities into Databricks' platform, bolstering its competitive edge in the AI and analytics market.

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Overview

  • Databricks officially announced its $1 billion acquisition of Neon, an open-source, serverless Postgres database platform, on May 14, 2025.
  • Neon, founded in 2021, serves over 18,000 customers, including OpenAI, Adobe, and Boston Consulting Group, with its cloud-based database solutions.
  • The deal marks Databricks' third major acquisition in recent years, following MosaicML in 2023 for $1.3 billion and Tabular in 2024 for over $1 billion.
  • Neon's features, such as automatic scaling, branching, and point-in-time recovery, align with Databricks' strategy to enhance AI-driven workflows and data services.
  • The acquisition positions Databricks to compete more aggressively with cloud providers like AWS, Microsoft, and Snowflake in the growing data-AI infrastructure market.