Databricks has announced its plan to acquire Neon, a leading serverless Postgres provider, for $ 1 billion.
Neon’s offering is designed to support AI agents, a key element in modern development workflows. According to recent data, over 80% of databases created on Neon are provisioned automatically by AI agents, rather than humans.
“The era of AI-native, agent-driven applications is reshaping what a database must do,” said Ali Ghodsi, co-founder and CEO at Databricks in a company statement. “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 platform allows for rapid database spin-up, with Postgres instances created in under 500 milliseconds, while offering cost scalability and full compatibility with the open-source Postgres ecosystem.
Neon is a cloud-native, serverless PostgreSQL database designed for developers and AI-driven apps. Launched in 2021 by Nikita Shamgunov, Heikki Linnakangas, and Stas Kelvich, it separates storage and compute for instant provisioning, auto-scaling, and branching. This approach allows developers to quickly spin up isolated environments for rapid testing and iteration.
Databricks aims to integrate Neon’s technology with its Data Intelligence Platform, addressing AI workload bottlenecks. The acquisition will help Databricks to provide developers with a serverless, scalable Postgres platform suited for AI applications.
“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 Neon CEO Shamgunov.
Neon’s team will join Databricks after the acquisition, continuing to support its community.
This move is set to transform the $100-billion-plus database market, which is experiencing significant disruption due to AI advancements.
Similarly, Databricks acquired Fennel last month, an engineering platform, to support customers in iterating on features, improving model performance with reliable signals.
Last year, Databricks’ acquired Tabular, a data management startup founded by Ryan Blue, Daniel Weeks, and Jason Reid for $1 billion.
