Meta joins $10 billion investment in Databricks as data analytics startup prepares for potential IPO

Meta has invested in data analytics startup Databricks, the company revealed on Wednesday, according to a report from CNBC. This addition to Databricks’ roster of investors underscores the startup’s rapid rise in the AI-driven software industry.

The news comes just a month after Databricks secured $10 billion in a funding round led by Thrive Capital, with heavyweights like Andreessen Horowitz, DST Global, GIC, Insight Partners, and WCM Investment Management also participating.

The funding will fuel Databricks’ ambitions to develop cutting-edge AI products, explore acquisitions, and expand its international footprint. The raise underscores Silicon Valley’s growing appetite for innovative AI solutions and positions Databricks as a leader in the field.

Founded in 2013, Databricks was the brainchild of Ali Ghodsi (CEO), Andy Konwinski, Ion Stoica, Matei Zaharia, Patrick Wendell, Reynold Xin, and Scott Shenker. The company’s platform integrates data engineering, machine learning, and analytics, helping over 5,000 organizations—including Comcast, Condé Nast, Nationwide, and H&M—streamline their data operations. Impressively, more than 40% of Fortune 500 companies are among its clientele.

Meta’s Role in the Partnership

Meta’s involvement in the funding round brings more than capital—it also reinforces an existing collaboration. Meta, known for its Llama open-source large language models (LLMs), has worked closely with Databricks, which builds its AI solutions on these models. CEO Ali Ghodsi emphasized this relationship, noting discussions with Meta CEO Mark Zuckerberg about the future of open-source AI.

“We’ve discussed open-source software in the past, and he cares a lot about open-source models and Llama,” Ghodsi shared in an interview with CNBC, highlighting the shared vision between the two companies.”

A Rare Investment Move for Meta

While Meta doesn’t frequently invest in startups compared to peers like Alphabet and Microsoft, its backing of Databricks signals confidence in the company’s trajectory. The $10 billion round, one of the largest in venture capital history, also included Qatar’s sovereign wealth fund, the Qatar Investment Authority. With this funding, Databricks has now raised $14 billion in venture capital.

The latest capital injection will not only support global expansion but also provide liquidity for current and former employees. Additionally, Databricks secured a $5.25 billion credit facility led by JPMorgan Chase, a strategic move that avoids shareholder dilution despite higher interest rates, CNBC reported.

“On Wednesday Databricks also announced a $5.25 billion credit facility led by JPMorgan Chase. Credit can be a much better option than spending with stock and diluting existing shareholders, even with a high interest rate, Ghodsi said.”

A Growing Footprint and Ambitious Goals

With 8,000 employees and a strong market presence, Databricks is preparing for what could be a major initial public offering (IPO) in the near future. “It wouldn’t be a huge surprise to me if we were public a year from now,” Ghodsi remarked.

Databricks’ ambitions extend beyond the U.S. The company is exploring opportunities to make its software compatible with data centers operated by major players in the Middle East, marking a significant step in its international strategy. Currently, its platform is available through Amazon, Google, and Microsoft cloud services.

Earlier this year, we reported on Databricks following reports that the company, along with Snowflake, was in discussions to acquire Voyage, an emerging leader in AI search technology.

A Balanced Partnership for the Future of AI

Last year, Databricks made headlines by training its own open-source LLM, DBRX, at a cost of $10 million. While the model initially outperformed Meta’s Llama in certain benchmarks, competitors quickly surpassed it. Aligning with Meta, a leader in open-source AI, enables Databricks to allocate resources toward other priorities while leveraging Meta’s robust infrastructure and expertise.

Ghodsi declined to confirm whether Meta is a Databricks client, but the partnership’s significance is clear. As Meta ramps up investments in AI, its collaboration with Databricks could help shape the next generation of AI-powered solutions.

Looking Ahead

Databricks is not just scaling operations—it’s rewriting the playbook for what’s possible in AI-driven data analytics. With a strong investor lineup, ambitious plans for global expansion, and an eye on an IPO, Databricks is a company to watch as it continues to make waves in the tech industry.