The Californer - Databricks Agrees to Acquire Neon to Deliver Serverless Postgres for Developers + AI Agents USA - English India - English

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SAN FRANCISCO, May 14, 2025 ~ In a move that is set to shake up the $100-billion-plus database market, Databricks, the Data and AI company, has announced its intention to acquire Neon, a leading serverless Postgres company. This acquisition comes at a time when the industry is bracing for unprecedented disruption driven by AI.

Databricks plans to continue investing in Neon's database and developer experience for both existing and new customers and partners. The company recognizes the growing importance of AI agents in modern development workflows and sees Neon as an open, serverless foundation that can support these agentic workloads.

Recent internal telemetry from Neon has shown that over 80 percent of databases provisioned on their platform were created automatically by AI agents rather than humans. This highlights the rapid growth of agentic workloads and their distinct characteristics compared to human-driven patterns.

One key difference is speed and flexibility. Agents operate at machine speed, making traditional database provisioning a bottleneck. However, Neon can spin up a fully isolated Postgres instance in just 500 milliseconds or less. It also supports instant branching and forking of not only database schema but also data, ensuring that experiments do not disrupt production.

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Another important factor for AI agents is cost proportionality. They require a cost structure that scales precisely with usage, which is achieved through Neon's full separation of compute and storage. This keeps the total cost of ownership proportional to the queries run by thousands of ephemeral databases.

Additionally, agents expect to leverage the rich Postgres community, which Neon fully supports as it is 100 percent Postgres-compatible and works seamlessly with popular extensions.

According to Ali Ghodsi, Co-Founder and CEO at Databricks, "The era of AI-native, agent-driven applications is reshaping what a database must do." He believes that bringing Neon into Databricks will provide developers with a serverless Postgres solution that can keep up with agentic speed while offering pay-as-you-go economics and the openness of the Postgres community.

The shared vision of Databricks and Neon is to remove the traditional limitations of databases that require compute and storage to scale in tandem. This inefficiency has been a hindrance for AI workloads, but with the integration of Neon's serverless Postgres architecture into Databricks' Data Intelligence Platform, developers and enterprise teams can efficiently build and deploy AI agent systems.

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Nikita Shamgunov, CEO of Neon, expressed excitement about joining forces with Databricks. "Four years ago, we set out to build the best Postgres for the cloud that was serverless, highly scalable, and open to everyone," he said. "With this acquisition, we plan to accelerate that mission with the support and resources of an AI giant."

The talented team at Neon is expected to join Databricks after the transaction closes, bringing deep expertise and continuity for Neon's vibrant community. Together, Neon and Databricks aim to empower organizations to eliminate data silos, simplify architecture, and build more responsive, reliable, and secure AI agents.

More details about this proposed acquisition will be shared at the Data + AI Summit in San Francisco from June 9-12. The transaction is subject to customary closing conditions, including any required regulatory clearances.

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