Databricks has announced a new strategic funding round that values the company at $188 billion. The capital will be used to further expand the company’s AI strategy, including initiatives related to AI governance, AI assistants, and databases for AI agents.
The funding round is led by existing shareholder Coatue and includes both new and current investors. Databricks has signed a term sheet for this round and expects to finalize the financing later this summer. The company did not disclose how much capital will be raised in this round. According to an earlier report by The Wall Street Journal, cited by Reuters, the investment amounts to approximately $3 billion.
The new valuation comes shortly after Databricks raised approximately $5 billion in a previous funding round. This makes the company one of the highest-valued private software companies in the world. Analysts have also long viewed Databricks as a likely candidate for an initial public offering (IPO), alongside AI companies such as OpenAI and Anthropic, according to Reuters.
Investments in AI platform
According to Databricks, the new capital will be used to accelerate the development of various AI products. Among other things, the company mentions Unity AI Gateway, a platform that allows organizations to manage multiple AI models and control their use. It also mentions Genie, an AI assistant that can answer questions about business data, and Lakebase, a serverless PostgreSQL database developed for AI agents.
In addition, Databricks plans to use the funds for future acquisitions in the AI sector and for further research into AI technology.
Databricks states that many organizations struggle to deploy AI at scale because business data is scattered across different systems and governance is lacking. As a result, the costs, security, and reliability of AI applications are difficult to manage. The company positions its Data + AI Platform as a solution that brings data and AI together and gives organizations more control over the use of AI.
CEO Ali Ghodsi sees a shift in the way companies deploy AI. According to him, it is no longer about using the most powerful model for every task, but about choosing the model that offers the best price-performance ratio for each application. He believes this also explains why Databricks continues to invest in a strategy that allows customers to use multiple AI models side by side.
AI investments remain high
The new funding round is part of a broader trend in which investors continue to pour billions into companies benefiting from the rapid adoption of AI. This applies not only to developers of large language models but also to providers of the infrastructure on which companies build their AI applications. In this segment, Databricks competes with companies such as Snowflake and has been steadily expanding its platform in recent years with features for generative AI and AI agents.