Databricks is reportedly in talks to raise $5 billion at a $134 billion valuation

Data analytics and artificial intelligence company Databricks is reportedly in talks to raise $5 billion in new funding at a valuation of $134 billion.

If the new funding goes ahead, it would come after Databricks raised money in August at a valuation of $100 billion, The Information reported today.

The round values ​​the company at about 32 times the company’s expected sales of $4.1 billion next year, according to Reuters. This comes at a time when enterprise demand for the Databricks platform continues to increase as organizations expand their use of generative AI, machine learning, and real-time analytics.

Founded in 2013, Databricks provides cloud-based data and artificial intelligence software that provides organizations with an integrated platform for data engineering, analytics, and machine learning. The company’s core platform is designed to replace fragmented data stacks with a single environment where data teams can work from raw ingestion to advanced analysis.

Databricks’ “lakehouse” architecture combines the low-cost storage of a data lake with the performance and management capabilities of a traditional data warehouse. This approach allows organizations to store structured and unstructured data in one place while supporting SQL analytics, real-time streaming, and large-scale batch processing.

In addition to analytics, Databricks also provides a platform for enterprise AI and machine learning, with tools to support full lifecycle AI development, including feature engineering, model training, evaluation, and deployment.

As Databricks noted when it raised capital in August, the company is locked in a battle with rival Snowflake for supremacy in AI development, but unlike Snowflake, it has resisted pressure to go public.

If it eventually goes public, the proposal will likely be well-received, unless the AI-driven boom in stock markets currently being discussed collapses. Best known for analytics, Databricks’ revenue growth is being driven by the organization expanding its use of generative AI and machine learning.

AI may be a key driver of Databricks’ growth, but it’s also putting pressure on margins, with the company reportedly telling investors that increased usage of its AI products is causing gross profit margins to fall faster than expected, to 74% compared to 77% originally planned.

Databricks has over 20,000 customers. Databricks’ notable customers include OpenAI Group PBC, Block Inc., Shell plc, Siemens AG, Toyota Motor Corporation, AT&T Inc., Walgreens Boots Alliance Inc., and Rivian Automotive Inc.

In terms of potential new funding, Databricks has raised about $15.7 billion in 15 rounds to date, according to Tracxn data. Investors in the company include Andreessen Horowitz, Insight Partners LP, MGX Capital, Thrive Capital Management, WCM Investment Management, The Blackstone Group Inc., Apollo Global Management Inc., Blue Owl Capital Inc., JPMorgan Chase & Co., Barclays plc, Citigroup Inc., Goldman Sachs Group Inc., and Morgan Stanley.

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