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Sunday, April 14, 2024

Databricks’ Acquisition of MosaicML – Matt Turck


(This submit is a part of my “This Week in AI” collection, which is common off-the-cuff market commentary. I’m not an investor in both MosaicML or Databricks)

$21M per worker. That’s the value Databricks is paying for MosaicML — a complete of $1.3B for 62 staff (in Databricks inventory, and likewise contains worker retention packages).

One factor is obvious – when you’re going to be aggressively buying Generative AI startups, you’re going to should pay up

However it could grow to be low-cost in the long run given the dimensions of the chance.

That’s as a result of, past any Generative AI capabilities, Databricks’ transfer must be understood within the broader context of its fierce rivalry with Snowflake.

(Some facets of that rivalry are just a little foolish – they (mysteriously) scheduled their massive conferences on the identical actual dates this week.)

Each are vying to be the brand new information clouds, essentially the most gigantic enterprise market.

It’s turn out to be apparent that successful that market means being one of the best information repository (warehouse, information lake, information lakehouse) AND the place the place enterprises do all their information science and ML/AI work.

Each Databricks and Snowflake have been beefing up their ML/AI capabilities, in 3 ways:

Homegrown: Databricks traditionally has had an ML/AI providing. It additionally lately launched Dolly, its personal LLM.

Partnerships: for instance, Dataiku, the main pure play enterprise AI platform for International 2000 firms, is a prime ML/AI associate for each firms.

Acquisitions: Snowflake acquired Streamlit for $800M final 12 months and AI search firm Neeva for $150M this 12 months (excluding retention packages). Databricks has made a number of acquisitions as properly, MosaicML being the largest one to this point.

The chess (and thoughts) video games between Snowflake and Databricks are fascinating – and there’s much more coming! Within the meantime, massive congrats to MosaicML and Databricks.

Observe: I’m simply utilizing the value per worker as a proxy to point it is a massive acquisition for a nonetheless small firm. I don’t have direct data of what Mosaic had constructed up to now apart from what’s within the press, but it surely appeared promising. [Update: it was subsequently reported, after the time of writing, that Mosaic was at $20M ARR]

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