Databricks, a leading data and AI company, acquires Neon, a cloud-native serverless Postgres platform, in a deal valued at approximately USD 1 billion. This acquisition will aim at bolstering Databricks’ capabilities in supporting AI-native applications and agent-driven workloads.
Nikita Shamgunov, Heikki Linnakangas, and Stas Kelvich founded Neon in 2021 to offer a managed, open-source Postgres solution optimized for cloud and AI applications. Moreover, the platform lets developers clone databases, test changes in isolated environments, and restore data from any point in time. Additionally, Neon’s architecture automatically scales compute, memory, and storage, providing a flexible, pay-as-you-go model that suits the fast-paced demands of AI-generated, short-lived databases.
Data from both companies shows that AI agents, not humans, provision over 80% of the databases created on Neon. This shift highlights a significant transformation in how developers build and deploy applications, as AI agents increasingly require fast, flexible infrastructure to operate effectively.
Ali Ghodsi, co-founder and CEO at Databricks, said, “The era of AI-native, agent-driven applications is reshaping what a database must do. Neon proves it: four out of every five databases on their platform are spun up by code, not humans. By bringing Neon into Databricks, we’re giving developers a serverless Postgres that can keep up with agentic speed, pay-as-you-go economics, and the openness of the Postgres community.”
Neon’s architecture is set to enhance Databricks’ existing Data Intelligence Platform by enabling developers to launch isolated Postgres instances in under 500 milliseconds. It also offers branching and forking capabilities at both the schema and data levels, facilitating experimentation without affecting live production environments.
Traditional architectures that couple compute and storage have limited flexibility, especially for the dynamic needs of AI agents. By decoupling these components, Databricks and Neon plan to reduce latency, improve cost efficiency, and simplify infrastructure management—key advantages for organizations building AI systems at scale.
“Four years ago, we set out to build the best Postgres for the cloud that was serverless, highly scalable, and open to everyone. With this acquisition, we plan to accelerate that mission with the support and resources of an AI giant,” said Nikita Shamgunov, CEO of Neon. “Databricks was founded by open-source pioneers committed to making it easier for developers to work with data and AI at any scale. Together, we are starting a new chapter on an even more ambitious journey.”
Once they complete the acquisition—pending regulatory approvals and standard closing conditions—Databricks will integrate Neon’s team, who will continue developing their database technology and engaging with their developer community. The companies plan to share more details at the upcoming Data + AI Summit in San Francisco, scheduled for June 9 to 12.
Neon has raised USD 129.5 million from investors including Microsoft’s M12, Menlo Ventures, General Catalyst, and Notable Capital. Databricks has secured over USD 19 billion in funding to date, with a USD 15.3 billion round earlier this year boosting its valuation to USD 62 billion. By acquiring Neon—following its recent purchases of Tabular and MosaicML—Databricks continues to accelerate its expansion into the AI and data infrastructure space.
