Databricks acquires Neon to expand its offering for developers and AI applications with a serverless Postgres platform.
About two weeks ago, Databricks was still in talks with database startup Neon about a possible acquisition. Amounts of more than a billion euros were reportedly on the table. On Wednesday, Databricks officially announced the acquisition. With this, the company aims to provide developers and AI agents access to a serverless Postgres platform, responding to the increasing demand for flexible databases for AI workloads.
Postgres for AI agents
Neon offers a serverless version of the relational database Postgres. According to Databricks, this is particularly suitable for applications where AI agents automatically create and use databases. Internal figures from Neon show that over 80 percent of the databases on the platform are initiated by AI agents rather than humans.
read also
Databricks considers acquiring database specialist Neon for $1 Billion
Neon distinguishes itself by being able to start databases in less than half a second. Additionally, the platform can instantly duplicate schemas and data to allow experiments without disturbing production data. The separation of storage and compute also makes it possible to run many short-lived databases without high costs. Finally, Neon remains fully compatible with the open-source Postgres ecosystem.
Integration with Databricks platform
Databricks plans to integrate Neon’s serverless architecture into its own Data Intelligence Platform. This aims to help developers build more efficient AI solutions without the traditional limitations of databases that need to scale compute and storage together. This would improve performance, simplify infrastructure, and reduce costs.
The Neon team is expected to join Databricks upon completion of the acquisition. Both parties plan to further elaborate on their collaboration during the Data + AI Summit in San Francisco, from June 9 to 12. The acquisition is still subject to regulatory approvals.