Databricks raises funding round at USD $188 billion

Databricks is raising a strategic funding round at a USD $188 billion valuation, led by existing investor Coatue.

It has signed a term sheet for the financing and expects the deal to close later this year. The round will also include other new and existing investors, although they were not named.

Databricks plans to use the money to expand its artificial intelligence work across three products: Unity AI Gateway, Genie and Lakebase. The funds are also expected to support future AI acquisitions and further research.

Databricks describes Unity AI Gateway as a system for managing the use and cost of multiple AI models. Genie is an AI assistant for business data, while Lakebase is a serverless Postgres database intended for AI agents.

The fundraising gives Databricks fresh backing at a valuation that places it among the most highly valued private technology companies. It also highlights investor appetite for companies building tools for business use of artificial intelligence.

Databricks says many organisations still face practical barriers when trying to deploy AI widely across their operations. These include data spread across different systems, weak links between data platforms and AI tools, and concerns over cost control, security and reliability.

AI focus

The company has built its pitch around bringing data and AI systems together on one platform. Its argument is that businesses need better access to internal data and tighter control over how models are selected and used if AI projects are to produce returns.

That view is reflected in the products highlighted in the funding announcement. Rather than focusing only on model development, Databricks is emphasising governance, data access and database infrastructure that can support AI applications inside large organisations.

More than 20,000 organisations worldwide use its platform, according to Databricks, including adidas, AT&T, Bayer, Block, Mastercard, Rivian and Unilever. The company also says 70% of Fortune 500 companies rely on its software.

Databricks is headquartered in San Francisco and has more than 30 offices globally. Its broader product portfolio includes Agent Bricks, Lakeflow, Lakehouse and Unity Catalog, alongside the tools mentioned in the funding round.

Ali Ghodsi, Co-Founder and Chief Executive Officer of Databricks, linked the company's strategy to changing customer expectations around AI spending and model choice.

"Enterprises are moving from tokenmaxxing to valuemaxxing. They don't want to burn expensive tokens on the smartest model for every task - they want the best outcome per dollar. That means having the freedom to choose the right AI for the job," said Ali Ghodsi, Co-Founder and Chief Executive Officer of Databricks.

He said the new funding would support that approach across the company's core AI products.

"This new capital lets us keep pushing our multi-AI strategy forward to meet massive customer demand, so we can keep strengthening Unity AI Gateway, expanding Genie, and advancing Lakebase," said Ghodsi.