Databricks to Acquire Neon, Enhancing Serverless Postgres Capabilities for AI Workloads
Databricks, a leading Data and AI company, has announced its plans to acquire Neon, a prominent serverless Postgres company. This strategic move aims to bolster Databricks’ database capabilities, particularly for AI-driven applications.
Revolutionizing Database Provisioning for AI Agents
Neon has been at the forefront of supporting AI agents with its serverless Postgres architecture. Recent telemetry data from Neon revealed that over 80% of databases provisioned on their platform were created automatically by AI agents, rather than humans. This highlights the rapidly growing demand for agentic workloads, which differ significantly from traditional human-driven patterns in three key ways:
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Speed and Flexibility: AI agents operate at machine speed, making traditional database provisioning a potential bottleneck. Neon’s platform can spin up a fully isolated Postgres instance in 500 milliseconds or less, supporting instant branching and forking of both database schema and data. This ensures that experiments never disturb production environments.
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Cost Proportionality: AI agents require a cost structure that scales precisely with usage. Neon’s architecture separates compute and storage, keeping the total cost of ownership for thousands of ephemeral databases proportional to the queries they actually run.
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Open Source Ecosystem: AI agents expect to leverage the rich Postgres community. Neon is 100% Postgres-compatible and works seamlessly with popular extensions, making it an ideal choice for developers.
Shared Vision for AI-Native Applications
The acquisition aligns with Databricks’ vision of supporting AI-native, agent-driven applications. By integrating Neon’s serverless Postgres architecture with the Databricks Data Intelligence Platform, developers and enterprise teams will be able to efficiently build and deploy AI agent systems. This integration addresses traditional database limitations, such as the need for compute and storage to scale in tandem, which can hinder AI workloads.
“The era of AI-native, agent-driven applications is reshaping what a database must do,” said Ali Ghodsi, Co-Founder and CEO at Databricks. “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.”
Nikita Shamgunov, CEO of Neon, added, “With this acquisition, we plan to accelerate our mission to build the best Postgres for the cloud that is serverless, highly scalable, and open to everyone, with the support and resources of an AI giant.”
Future Plans and Benefits
The acquisition is subject to customary closing conditions, including regulatory clearances. Once completed, Neon’s talented team is expected to join Databricks, bringing deep expertise and continuity for Neon’s vibrant community. Together, they will empower organizations to eliminate data silos, simplify architecture, and build AI agents that are more responsive, reliable, and secure.
More details about the acquisition and its implications are expected to be shared at the Data + AI Summit in San Francisco, taking place from June 9–12, 2025.
