According to sources, Snowflake is in talks to acquire Observe for approximately $1 billion. It would be the largest acquisition to date for Snowflake, which has already closed several deals in 2025 to expand its business.
As the name Observe suggests, it is active in the observability market. The deal would therefore put Snowflake in direct competition with players such as Datadog, Dynatrace, and Splunk, which was acquired by Cisco. Observe, based in San Mateo, California, offers a monitoring and analysis platform for software developers and IT departments.
Observe already runs on Snowflake
Observe’s flagship product is an AI-powered agentic assistant that investigates incidents. Notably, Observe already uses Snowflake’s database technology for its own platform. This would make the startup a good fit for the existing ecosystem. There would also be little friction for joint customers if the acquisition goes ahead.
Snowflake has recently made several acquisitions to strengthen its AI portfolio. Earlier this year, it acquired Crunchy Data, Datavolo, and TruEra AI, among others. The largest acquisition the company has made to date is Streamlit, which was purchased for $800 million in March 2022.
Both Snowflake and its competitor Databricks are engaged in an acquisition offensive focused primarily on AI. Many organizations are currently testing autonomous, targeted AI agents. Both companies focus on helping customers develop their own AI agents using data that organizations have in-house.
Busy observability market
The observability market is becoming increasingly crowded. Much of this activity comes from players that are becoming part of a larger entity, sometimes active in security, sometimes in data management. In November, Palo Alto Networks announced the acquisition of Chronosphere for $3.35 billion as an example of how observability fits into a security platform. Chronosphere’s specialty is not directly focused on security: it sells observability software that allows companies to monitor the performance of cloud servers and applications.
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