Databricks Raises $10B in Biggest Venture Deal of 2024

San Francisco-based data analytics company Databricks has raised a record-breaking $10 billion in its Series J funding round, valuing the company at $62 billion. This historic investment—on par with Microsoft’s $10 billion backing of OpenAI in 2023—signals confidence that Databricks will play a pivotal role in the emerging AI boom. Major investors in the round include Thrive Capital and Andreessen Horowitz, both of whom are key OpenAI supporters.

Databricks’s Bet on AI: MosaicML and the DBRX Advantage

For years, Databricks has helped enterprises securely host and analyze their data. In 2023, the company acquired MosaicML, a move that positioned it to offer generative AI tools alongside its existing data solutions. This allows Databricks customers to build custom AI models in the same secure cloud that already stores their proprietary data—eliminating the risk of exposing sensitive information to third-party AI providers via APIs.

In March, Databricks introduced DBRX, its own large language model (LLM) and one of the first major products of the MosaicML acquisition. While DBRX isn’t as powerful as Google’s Gemini or OpenAI’s GPT-4, it is highly optimized for enterprise use. For many companies, massive, general-purpose AI models are unnecessary. Instead, models like DBRX offer specialized capabilities that businesses need for tasks like fraud detection in financial data or disease pattern recognition in healthcare records.

DBRX: A "Mixture-of-Experts" Model

The secret behind DBRX lies in its "mixture-of-experts" architecture. Instead of relying on the entire model to solve every problem, DBRX divides its 132-billion-parameter brain into 16 specialized experts. When a task is presented, a "router" determines which expert to activate, allowing the model to use only 36 billion parameters at a time.

This efficient design offers several advantages:

• Lower Compute Costs: By activating only the necessary parameters, DBRX reduces energy usage and resource demands.
• Faster Responses: The optimized processing speeds up response times for businesses.
• Improved Accessibility: Companies can deploy AI models for day-to-day operations without massive compute investments.

For businesses looking to adopt AI in practical, cost-effective ways, this architecture lowers barriers to entry and improves ROI.

Positioned for Long-Term AI Growth

Databricks’s CEO Ali Ghodsi views this funding as a stepping stone toward a much larger vision. “These are still the early days of AI,” Ghodsi said, emphasizing the company's commitment to its Data Intelligence Platform. By blending advanced AI models with secure data infrastructure, Databricks is helping industries—from finance to healthcare—unlock actionable intelligence.

With over 12,000 customers, Databricks has positioned itself as a leader in enterprise AI solutions. Its focus on efficiency, security, and scalable AI makes it a critical player in the AI arena, one that investors clearly believe will deliver significant long-term value.

A Path Toward IPO

The massive $10 billion funding round underscores Databricks’s momentum and signals that it could be preparing for an initial public offering (IPO). As AI continues to reshape industries, Databricks is poised to lead the charge—providing businesses with the tools to extract insights, improve operations, and compete in the data-driven economy.