Power Play: Databricks Expands with $1.3B Acquisition of MosaicML, OpenAI Competitor

by / ⠀News / June 26, 2023
Power Play: Databricks Expands with $1.3B Acquisition of MosaicML, OpenAI Competitor

Artificial Intelligence (AI) has become one of the most exciting and rapidly evolving fields in technology. As the demand for AI solutions continues to grow, so does the interest in acquiring companies that specialize in this area. Databricks’ recent acquisition of MosaicML, an open-source firm with expertise in neural networks and generative AI, for $1.3 billion is one such acquisition creating waves in the industry.

MosaicML, prior to the acquisition, had raised nearly $64 million in funding from prominent investors such as DCVC, AME Cloud Ventures, Lux, Frontline, Atlas, Playground Global, and Samsung Next. This acquisition marks a significant leap for MosaicML, as its last valuation was just $222 million. The fact that Databricks was able to acquire MosaicML for such a substantial amount underscores the frothy nature of the AI market and the high demand for talent and technology in this space.

Databricks, a leading analytics platform, is well-known for its multi-cloud offerings and its commitment to helping organizations leverage the power of AI. By acquiring MosaicML, Databricks aims to enhance its existing Lakehouse Platform with generative AI tooling. This strategic move will enable Databricks to provide organizations with the ability to train large language models (LLMs) and deploy generative AI tools based on them.

What sets MosaicML apart is its two-fold approach. First, it operates as an open-source platform, allowing organizations to build their own LLMs based on their specific data. Second, MosaicML aims to enable businesses to rapidly construct and efficiently train cutting-edge models with little outlay of resources. Customers including the Allen Institute for AI, Generally Intelligent, Replit, Hippocratic AI, Replit, and Scatter Labs have been attracted by the company’s latest release, MPT-30B, which exemplifies the success of this strategy.

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The acquisition of MosaicML by Databricks aligns with their shared vision of democratizing AI and empowering organizations to have more control over their data. Databricks’ CEO, Ali Ghodsi, emphasizes the importance of democratizing AI and making the Lakehouse Platform the best place to build generative AI and LLMs. Ghodsi believes that Databricks and MosaicML’s combined expertise, rooted in transparency and open-source contributions, will deliver significant value to customers as they navigate the computing revolution driven by AI.

With the acquisition, Databricks will integrate the entire MosaicML team into its operations, ensuring continuity and retention of talent. Naveen Rao, CEO, and co-founder of MosaicML, an Intel alumnus, will be part of the team staying on board. Rao expresses his excitement about joining forces with Databricks and their shared mission of empowering individuals and organizations to build and train their own models. Together, they aim to tip the scales in favor of many and contribute to the AI community’s growth.

This acquisition is just one example of the ongoing M&A activity in the AI space. Snowflake, a competitor to Databricks, recently made its own AI acquisition by acquiring Neeva, a startup focused on AI-driven search capabilities. The competition and interest in AI companies highlight the immense potential and opportunities in this rapidly evolving field.

As the AI market continues to expand, we can expect more acquisitions and partnerships to drive innovation and growth. Databricks’ acquisition of MosaicML positions them as a key player in the AI landscape, allowing them to offer comprehensive AI solutions within their Lakehouse Platform. With the integration of MosaicML’s expertise, Databricks is well-positioned to meet the growing demand for AI technologies and empower organizations to harness the power of AI for their specific needs.

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In conclusion, Databricks’ $1.3 billion acquisition of MosaicML represents a significant milestone in the AI market. This strategic move underscores the high demand for AI technologies and the value placed on talent and expertise in this field. As Databricks integrates MosaicML into its operations, we can expect a new wave of innovation and advancements in generative AI and LLMs, further propelling the AI revolution.

First reported on TechCrunch

About The Author

Becca Williams

Becca Williams is the editor of SmallBizTechnology.com.

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