Databricks is making a significant move in the artificial intelligence (AI) industry by acquiring MosaicML, an open-source startup specializing in neural networks. The $1.3 billion acquisition signifies the growing interest in the AI market, as well as the demand for skilled talent in this cutting-edge field.
Prior to the acquisition, MosaicML had raised just under $34 million from investors, including DCVC, AME Cloud Ventures, Frontline, Atlas, Playground Global, and Samsung Next. With its last investor-round valuation at $136 million, the considerable 10x leap with this exit highlights the current high demand and potential for growth in the AI market.
MosaicML will become an integral part of the Databricks Lakehouse platform, offering generative AI tooling along with its range of multi-cloud offerings such as integration, storage, processing, governance, sharing, analytics, and other AI-related services. This acquisition comes in the wake of OpenAI making waves in the AI industry with groundbreaking generative AI technologies, backed by heavy investments from tech giants like Microsoft.
Unlike OpenAI, MosaicML maintains an open-source approach, with an emphasis on organizations building and training large language models (LLMs) using their own data. The company's latest release, MPT-30B, demonstrates how organizations can rapidly develop and train state-of-the-art models utilizing their data in a cost-effective manner. Some of MosaicML's customers include the Allen Institute for AI, Generally Intelligent, Hippocratic AI, Replit, and Scatter Labs.
Both Databricks and MosaicML share a common vision to democratize AI and make their combined Lakehouse platform the best place to build generative AI and LLMs. In a statement, Ali Ghodsi, Databricks' co-founder and CEO, emphasized that their unified goal is rooted in transparency, open-source contributions, and delivering value to customers as they embrace the most significant computing revolution of our time.
The entire MosaicML team will join Databricks upon the completion of the acquisition. This talent retention strategy likely contributes to the substantial price tag of the deal. MosaicML CEO and co-founder, Naveen Rao, an Intel alum, is among those joining the Databricks team.
With generative AI taking center stage in the technology industry, the acquisition of MosaicML by Databricks marks a crucial milestone in AI's rapid expansion. As the demand for AI-fueled technologies and talent continues to grow, more mergers and acquisitions are expected to follow in this highly competitive space. As the emergence of platforms like AppMaster.io and others demonstrate the growing need for low-code and no-code solutions to address premium technology demands.
