Databricks announced a new funding round that values the company at $188 billion, led by Coatue. The round has not closed yet, but the company pre-announced it, signaling strong investor demand. Just five months ago, in February, Databricks raised $5 billion at a $134 billion valuation, and in September 2025, it raised $1 billion at $100 billion. This rapid ascent stems from a radical transformation: from a big data platform to an artificial intelligence powerhouse.
The metamorphosis from big data to an AI company
Founded in 2013, Databricks initially grew as a software for storing and analyzing massive data sets in the cloud. With the generative AI boom, the company leveraged its enterprise data troves to offer secure and governed AI solutions. It launched products like Lakebase, a database for AI agents, Unity, an AI gateway, and Omnigent, a 'meta-harness' for managing multiple agents. This strategy positioned Databricks as a go-to for businesses wanting AI without losing data control.
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Adopting open-weight models to cut costs
A key element of Databricks' strategy is using open-weight models like Z.ai's GLM 5.2 to lower coding costs. CEO Ali Ghodsi recently shared internal benchmark results from 3,000 software engineers, showing that open-weight models handle complex tasks at a lower total cost than proprietary ones from Anthropic and OpenAI. The study also found that the choice of 'harness' (the tool wrapping the model and managing context) significantly impacts costs. The open-source harness Pi proved highly efficient, reducing expenses without sacrificing quality. 'The lesson is not that one harness is always cheaper, but that model choice is only one piece of the puzzle,' the company stated.
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This focus on cost efficiency has solidified Databricks' image as an AI company, attracting massive investments. The phenomenon is so pervasive that even sandwich chain Jersey Mike's mentioned AI 22 times in its S-1 filings. The AI race is reshaping market valuations, and Databricks is the clearest example.
For more on AI safety, read our article on the San Francisco Attorney ordering Apple and Google to remove deepfake apps. For a broader perspective, see Wikipedia's entry on artificial intelligence.
