Databricks, one of the most valuable privately held technology companies in the world, is raising a fresh round of funding at a valuation of $188 billion, underlining how much appetite there still is among investors for a stake in the artificial-intelligence boom.
The company announced the strategic round, led by the investment firm Coatue, and reported to be worth around $3 billion, with the deal expected to close later in the summer. The new valuation marks a roughly 40% increase from the level, about $134 billion, at which the company last raised money only months earlier, an unusually rapid rise even by the standards of the current AI frenzy.
From big data to AI platform
Databricks began life as a company for storing and analysing large amounts of data, and has repositioned itself as a platform for building and running artificial-intelligence systems, a shift that has made it one of the businesses investors most want to back. It says it will use the new money to develop its AI products, including tools that help large companies manage the cost and governance of the many AI models they use, and software aimed at the emerging world of AI "agents" that can carry out tasks.
The company counts a large share of the world's biggest corporations among its customers, and its rapid growth has made it a bellwether for enterprise AI, the business of selling AI tools to other companies rather than to consumers. Its chief rival in the public markets is Snowflake, and the two are often compared as competing bets on how businesses will store their data and deploy AI.
Private money, public jitters
What makes the timing notable is the contrast with the mood in public markets. This week has seen a sharp sell-off in chip stocks and a broader reassessment of whether the towering valuations attached to AI-related companies are justified, a wobble that even briefly reordered the ranks of the world's most valuable public companies.
Yet in private markets, the money has kept flowing. Databricks' leap in valuation, and the willingness of a major investor to lead a multibillion-dollar round, suggests that large venture and growth investors remain convinced of the long-term potential of AI, whatever the day-to-day gyrations of the stock market. Private valuations, set in negotiated deals rather than by daily trading, can also move more slowly, and more optimistically, than public share prices.
An exuberant, uncertain moment
The round adds to a striking run of enormous valuations for AI and data-infrastructure companies, as investors race to back the firms they believe will define the next era of computing. For Databricks, worth more than many long-established public companies despite remaining private, it is a vote of confidence and a substantial war chest with which to compete.
The wider question, the same one now unsettling public markets, is whether the returns will eventually justify the sums being invested. Enthusiasts point to real and growing demand for AI tools among businesses; sceptics warn of a bubble inflating faster than the technology can pay for itself. Databricks' latest fundraising will do nothing to settle that argument. But it is a clear sign that, for now, the biggest investors are still betting heavily that the AI wave has much further to run.
