Snowflake Inc. is set to acquire Crunchy Data for approximately $250 million, as reported by the Wall Street Journal. This strategic acquisition is part of Snowflake’s efforts to enhance its capabilities in artificial intelligence and meet the rising demand for AI agents tailored for different datasets. Following the announcement, Snowflake’s stock saw an increase of 2% in after-hours trading.
The move positions Snowflake in direct competition with Databricks, which has made headlines recently for its own acquisition of Neon for $1 billion. These acquisitions represent a trend within the tech industry of consolidating database technologies to develop advanced AI solutions.
Crunchy Data provides a managed PostgreSQL database platform utilized by large enterprises and various U.S. government departments to improve infrastructure management. Following the acquisition, Snowflake plans to integrate Crunchy Data into a new service named Snowflake Postgres, aiming to enhance its offerings for developers working with AI applications.
Around 100 Crunchy Data employees will join Snowflake as part of this acquisition, expected to conclude in the next few weeks. This new service is intended to be a pivotal component for AI developers working directly on enterprise data.
Snowflake’s commitment to AI infrastructure development comes as it seeks to compete with tech giants like Nvidia and OpenAI. This acquisition aligns with Snowflake’s earlier purchase of generative AI startup Neeva in 2023, further emphasizing its focus on AI innovations.
The demand for Snowflake’s AI solutions has been significant, with over 5,200 customers reportedly using its platform weekly for AI workloads. Additionally, the company reached a significant milestone by exceeding $1 billion in quarterly revenue for the first time in April, surpassing analyst expectations. Snowflake’s multicloud support, which spans across Amazon Web Services, Microsoft Azure, and Google Cloud, continues to drive demand as organizations move away from traditional on-premise data systems.
In conclusion, the acquisition of Crunchy Data represents a critical step for Snowflake in reinforcing its position within the growing AI landscape, showcasing its commitment to advancing technology that supports enterprise-level applications.