Databricks Agrees To Acquire Neon To Deliver Serverless Postgres For Developers + AI Agents

SAN FRANCISCO, May 14, 2025 /CNW/ -- Databricks, the Data and AI company, today announced its intent to acquire Neon, a leading serverless Postgres company. As the $100-billion-plus database market braces for unprecedented disruption driven by AI, Databricks plans to continue innovating and investing in Neon's database and developer experience for existing and new Neon customers and partners.

Neon: An Open, Serverless Foundation for Developers and AI Agents

AI agents are becoming increasingly integral components for modern developers, and Neon is purpose-built to support their agentic workflows. Recent internal telemetry showed that over 80 percent of the databases provisioned on Neon were created automatically by AI agents rather than by humans, underscoring how explosively agentic workloads are growing. These workloads differ from human-driven patterns in three important ways:

1. Speed + flexibility: Agents operate at machine speed and traditional database provisioning often becomes a bottleneck — Neon can spin up a fully isolated Postgres instance in 500 milliseconds or less and supports instant branching and forking of not only database schema but also data, so experiments never disturb production.
    
2. Cost proportionality: Agents demand a cost structure that scales precisely with usage — Neon's full separation of compute and storage keeps the total cost of ownership for thousands of ephemeral databases proportional to the queries they actually run.
    
3. Open source ecosystem: Agents expect to leverage the rich Postgres community — Neon is 100 percent Postgres-compatible and works out of the box with popular extensions.

"The era of AI-native, agent-driven applications is reshaping what a database must do," said Ali Ghodsi, Co-Founder and CEO at Databricks. "Neon proves it: four out of every five databases on their platform are spun up by code, not humans. 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."

Databricks and Neon's Shared Vision

Together, Databricks and Neon will work to remove the traditional limitations of databases that require compute and storage to scale in tandem — an inefficiency that hinders AI workloads. The integration of Neon's serverless Postgres architecture with the Databricks Data Intelligence Platform will help developers and enterprise teams efficiently build and deploy AI agent systems. This approach not only prevents performance bottlenecks from thousands of concurrent agents but also simplifies infrastructure, reduces costs and accelerates innovation — all with Databricks' security, governance and scalability at the core.

"Four years ago, we set out to build the best Postgres for the cloud that was serverless, highly scalable, and open to everyone. With this acquisition, we plan to accelerate that mission with the support and resources of an AI giant," said Nikita Shamgunov, CEO of Neon. "Databricks was founded by open source pioneers committed to making it easier for developers to work with data and AI at any scale. Together, we are starting a new chapter on an even more ambitious journey."

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

We plan to share more at Data + AI Summit in San Francisco, taking place June 9–12.

Details Regarding the Proposed Acquisition

The proposed acquisition is subject to customary closing conditions, including any required regulatory clearances.

About Neon

Neon was founded in 2021 by a team of experienced database engineers and Postgres contributors with a singular goal: to build a serverless Postgres platform that helps developers build reliable and scalable applications faster, from personal projects to startups, all the way to enterprises.

About Databricks

Databricks is the Data and AI company. More than 10,000 organizations worldwide — including Block, Comcast, Condé Nast, Rivian, Shell and over 60% of the Fortune 500 — rely on the Databricks Data Intelligence Platform to take control of their data and put it to work with AI. Databricks is headquartered in San Francisco, with offices around the globe and was founded by the original creators of Lakehouse, Apache Spark™, Delta Lake and MLflow. To learn more, follow Databricks on X, LinkedIn and Facebook.

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SOURCE Databricks