The American data management specialist Databricks has announced the acquisition of the startup Tabular to further strengthen its position in the field of artificial intelligence (AI). The acquisition, which is expected to cost between 1 and 2 billion US dollars, is anticipated to be completed by July 31. Most of Tabular's approximately 40 employees will move to Databricks.
Tabular, founded in 2021 by former Netflix employees Ryan Blue, Dan Weeks, and Jason Reid, offers cloud storage technologies based on Iceberg, an open-source table format for storing large amounts of data. Blue and Weeks had launched Iceberg in 2017.
With this acquisition, Databricks aims to make it easier for companies to use various data formats in the cloud, thereby improving the integration of corporate data into AI models. "We want to create tailored AI on all your data. We call this data intelligence," said Ali Ghodsi, CEO and co-founder of Databricks, in an interview.
The acquisition comes at a time when Databricks and other cloud data companies like Snowflake are heavily investing in AI. Both companies offer platforms for storing, organizing, and analyzing data across multiple cloud providers. The ability to efficiently utilize business data is crucial for developing and adapting AI models that can assist companies with data analysis, summarization, and other tasks.
David Menninger, an analyst at Ventana Research, emphasized that the integration of Tabular in Databricks will help companies improve their AI models by giving them access to a larger amount of information. This enables them to freely use and analyze data while applying methods such as Retrieval-Augmented Generation (RAG) to tailor AI models to business data.
Databricks plans to continue Tabular as a standalone business unit within the company's medical segment. The company expects that this acquisition will positively impact financial metrics. Tabular will also continue to contribute to the Iceberg open-source project.
This acquisition is Databricks' second billion-dollar acquisition within 12 months. Last June, the company acquired MosaicML for $1.3 billion to help businesses cost-effectively create their own AI models with proprietary data.
Databricks reported annual revenue of over 1.6 billion USD in March, reflecting a growth rate of over 50% compared to the previous year. The 11-year-old company, which was valued at 43 billion USD last September, continues to monitor the IPO market before deciding to go public.
On Monday, the competitor Snowflake introduced its Polaris Catalog, a solution to simplify the usage of the Iceberg format. Snowflake plans to offer the product as open-source to avoid dependency on its own ecosystem.
With over 12,000 customers already using Delta Lake, Databricks now plans to expand its customer base to include Iceberg users. This strategic acquisition is intended to help Databricks further extend its lead in the highly competitive AI and data analytics market.
