Databricks has announced its intent to acquire Neon, a fast-growing serverless Postgres startup, in a move that could reshape the $100 billion-plus database industry amid a wave of AI-driven transformation.
As artificial intelligence redefines software development, Databricks aims to enhance its data intelligence capabilities by integrating Neon’s cutting-edge, serverless Postgres platform — purpose-built for modern, AI-driven applications. The acquisition underscores Databricks’ commitment to investing in next-gen infrastructure for both existing and new Neon users and partners.
Neon has rapidly emerged as a go-to platform for AI-native workloads. Internal telemetry from the company reveals a striking trend: over 80% of the databases provisioned on Neon were created automatically by AI agents — not humans. This signals a paradigm shift in how developers are building, deploying, and managing data systems.
These agentic workloads differ from traditional patterns in several key ways:
- Speed and Flexibility: AI agents operate at machine speed. Neon supports this with rapid provisioning — spinning up fully isolated Postgres instances in under 500 milliseconds. Its branching and forking capabilities allow experimentation without disrupting production environments.
- Cost Efficiency: Neon’s architecture separates compute from storage, enabling usage-based pricing. This is ideal for handling thousands of ephemeral databases cost-effectively.
- Open Ecosystem: Fully Postgres-compatible, Neon integrates seamlessly with popular extensions and benefits from the rich open-source Postgres community.
A Strategic Fit
“The era of AI-native, agent-driven applications is reshaping what a database must do,” said Ali Ghodsi, Co-Founder and CEO of Databricks. “Neon proves it: four out of five databases on their platform are spun up by code, not humans. With Neon, we’re giving developers a serverless Postgres solution that matches the speed, scalability, and openness that AI demands.”
The integration of Neon’s serverless Postgres architecture with the Databricks Data Intelligence Platform will enable enterprises to eliminate traditional compute-storage bottlenecks and streamline AI development workflows. The combined solution aims to simplify infrastructure, reduce costs, and accelerate innovation — all underpinned by Databricks’ enterprise-grade security, governance, and scalability.
Nikita Shamgunov, CEO of Neon, expressed confidence in the partnership: “Four years ago, we set out to build the best cloud-native Postgres — serverless, scalable, and open to all. Joining Databricks supercharges our mission with the support of an AI leader. Together, we’re entering a bold new phase.”
Following the acquisition’s close — pending standard regulatory approvals — Neon’s team will join Databricks, bringing their technical expertise and dedication to an already thriving developer community. The partnership is expected to help customers break down data silos, streamline AI architecture, and build more responsive, reliable, and secure AI agents.
