Databricks Secures $10 Billion in Funding, Completes $5.25 Billion Debt Financing

Databricks Inc. has successfully closed its ambitious $10 billion funding round, initially announced last month. The company also finalized $5.25 billion in debt financing, with the participation of prominent financial institutions such as JPMorgan Chase, Barclays, and Citi.

Databricks Secures $10 Billion in Funding, Completes $5.25 Billion Debt Financing
Databricks Secures $10 Billion in Funding, Completes $5.25 Billion Debt Financing

Databricks Inc. has successfully closed its ambitious $10 billion funding round, initially announced last month. The company also finalized $5.25 billion in debt financing, with the participation of prominent financial institutions such as JPMorgan Chase, Barclays, and Citi.

Reports about Databricks' funding efforts first surfaced in November, with expectations at the time that the company would raise "at least" $5 billion. By mid-December, estimates suggested that the figure could exceed $9.5 billion. Shortly after, Databricks confirmed it had raised a total of $10 billion through its Series J round. Led by Thrive Capital, the funding included investments from notable entities like the Qatar Investment Authority, Temasek, Macquarie Capital, and Meta Platforms Inc.

The involvement of Meta in the funding round was particularly significant. Databricks co-founder and CEO Ali Ghodsi stated that the investment would deepen collaboration on artificial intelligence initiatives, particularly those focused on Meta's Llama large language models. According to Ghodsi, thousands of Databricks customers are already leveraging Llama models on the platform.

Databricks provides a cloud-based platform designed for managing and analyzing structured, unstructured, and semi-structured data. The platform allows users to run SQL queries, apply AI models to uncover patterns in data, and perform various analytical tasks. Built on a data lake architecture, Databricks supports the ACID data reliability standard, which ensures that incomplete data changes are rolled back and prevents conflicts in simultaneous data modifications.

In 2023, Databricks acquired MosaicML Inc., a venture-backed AI startup, for $1.3 billion. Since the acquisition, the company has expanded its platform with a variety of AI capabilities. For instance, Databricks offers pre-packaged SQL functions powered by Llama 3.1 70B, enabling users to summarize, translate, and perform other tasks without the need for manual deployment of an LLM. Additionally, the company employs an open-source tool called DSPy, which automates prompt engineering to optimize AI model outputs.

Ghodsi emphasized that businesses are modernizing their data and AI infrastructures as they recognize the "tremendous potential of generative AI." He highlighted the critical role of data intelligence in helping organizations achieve their business objectives.

The company plans to use the proceeds from the $10 billion funding round to develop new AI products, pursue acquisitions, and expand its operations in international markets. A portion of the funds will also be allocated to providing liquidity for existing and former employees.

The new funding reduces the urgency for a public offering. In a statement made in November, prior to reports of the funding round, Ghodsi noted that Databricks plans to go public as early as the second half of 2025. For now, the substantial funding will enable the company to focus on its strategic goals and solidify its position in the data and AI ecosystem.