Databricks to acquire generative AI platform MosaicML for $1.3 billion

Data lakehouse vendor Databricks today announced that it has agreed to acquire San Francisco-based generative AI platform MosaicML. The deal is valued at approximately $1.3 billion, inclusive of retention packages. The acquisition comes as Databricks works to expand its offering of AI products and services in order to meet the growing demand for generative AI tools like ChatGPT. 

According to Databricks, the partnership would combine its AI technology with MosaicML’s language-model platform, giving customers a “simple, fast way to retain control, security, and ownership over their valuable data without high costs.”

“Every organization should be able to benefit from the AI revolution with more control over how their data is used. Databricks and MosaicML have an incredible opportunity to democratize AI and make the Lakehouse the best place to build generative AI and LLMs,” said Ali Ghodsi, Co-Founder and CEO, Databricks. “Databricks and MosaicML’s shared vision, rooted in transparency and a history of open source contributions, will deliver value to our customers as they navigate the biggest computing revolution of our time.”

Founded in 2021 and raising $64 million to date from investors including Lux Capital and DCVC, MosaicML is a generative AI platform that enables businesses to build their own AI. Its customer portfolio includes AI2 (Allen Institute for AI), Generally Intelligent, Hippocratic AI, Replit and Scatter Labs.

“At MosaicML, we believe in a world where everyone is empowered to build and train their own models, imbued with their own opinions and viewpoints — and joining forces with Databricks will help us make that belief a reality,” said Naveen Rao, Co-Founder and CEO, MosaicML. “We started MosaicML to solve the hard engineering and research problems necessary to make large scale training more accessible to everyone. With the recent generative AI wave, this mission has taken center stage. Together with Databricks, we will tip the scales in the favor of many — and we’ll do it as kindred spirits: researchers turned entrepreneurs sharing a similar mission. We look forward to continuing this journey together with the AI community.”

Following a $1.6 billion financing round in August 2021, Databricks, which was founded in 2013, has a private-market valuation of $38 billion. UC Investments, ClearBridge Investments, Andreessen Horowitz, Baillie Gifford, and Counterpoint Global, a unit of Morgan Stanley, are among its investors. Last year, the company recorded more than $1 billion in annual revenue.

The entire MosaicML team will join Databricks after the transaction closes. The transaction is expected to close during Databricks’ second quarter, which ends on July 31.

According to PitchBook Data, spending in the worldwide generative AI industry is anticipated to reach $42.6 billion by the end of the year and increase at a compound annual rate of 32% to $98.1 billion by 2026.