Databricks is reportedly in discussions to raise $5 billion in new funding, potentially valuing the data and AI company at $134 billion. This significant valuation underscores the company's strong position in the rapidly growing data and AI market.
Funding and Valuation
If the funding round materializes, it would arrive shortly after Databricks' previous funding in August 2025, when the company was valued at $100 billion. The potential $134 billion valuation is approximately 32 times its projected 2026 revenue of $4.1 billion, signaling strong investor confidence in the company's technology and the increasing adoption of AI-driven solutions by enterprises. Databricks has already secured around $15.7 billion in funding across 15 rounds, with backing from investors like Andreessen Horowitz, Insight Partners, Apollo Global Management, and others.
Market Position and Growth
Founded in 2013, Databricks has become a key player in modern data architecture. Its cloud platform unifies data engineering, analytics, and machine learning, addressing the fragmented stacks that many organizations struggle with. Databricks' "lakehouse" architecture combines the cost-effectiveness of data lakes with the performance and governance of traditional data warehouses. This allows companies to store structured and unstructured data together while supporting SQL analytics, real-time streaming, and large-scale batch processing in one place. The platform also supports end-to-end machine learning workflows, making it a popular choice for businesses expanding their AI initiatives.
Databricks' revenue is expected to reach $4.1 billion in 2025, a 55% increase year-over-year, demonstrating the strong demand for AI and automation. The company's customer base has grown to over 20,000, including organizations like OpenAI, Block, Siemens, Toyota, Shell, AT&T, Walgreens Boots Alliance, and Rivian. This growth reflects the shift from AI experimentation to large-scale, production-ready deployments across various industries. Databricks holds a 16.43% market share in the big data analytics market and is used by over 17,506 companies worldwide.
Competitive Landscape
Databricks is competing with companies like Snowflake in the enterprise AI development space. While Snowflake has a larger market share in the data warehousing sector, Databricks is considered a top choice for running AI workloads. Unlike Snowflake, Databricks has not yet gone public, but an IPO is anticipated to be well-received when it occurs.
Challenges and Opportunities
While AI is driving Databricks' revenue growth, it's also impacting profitability. The company has informed investors that its gross margin has decreased to 74%, below the expected 77%, due to increased usage of its AI products. This highlights the rising costs associated with data centers and AI infrastructure.
Databricks is focused on expanding its AI strategy, including Agent Bricks and its new database offering, Lakebase. The company is also investing in AI acquisitions and research. Databricks has formed partnerships with companies like Microsoft, Google Cloud, Anthropic, SAP, and Palantir. These collaborations aim to integrate Databricks' solutions into broader cloud ecosystems and leverage the strengths of different AI technologies. In March 2025, Databricks partnered with Anthropic to incorporate Anthropic's AI products into the Databricks Data Intelligence Platform in a deal valued at $100 million. In June 2025, Databricks entered into a four-year partnership with Alphabet to incorporate the Gemini LLMs into the Databricks platform.
