Nvidia, Microsoft-Backed Databricks Bets Big On AI Agents With $1B Neon Takeover: Retail Turns Extremely Bullish

Nvidia-backed data and AI solutions provider Databricks has announced plans to acquire Neon, a company specializing in serverless Postgres databases.

This strategic acquisition allows Databricks to tap into the rapidly changing database market, now valued at over $100 billion, which is being reshaped by the increased adoption of artificial intelligence.

Databricks, which counts big tech names like Nvidia and Microsoft as its investors, is valued at $62 billion after the company raised $10 billion in series J funding last year. 

Neon’s infrastructure is built specifically to accommodate AI-driven processes and contemporary development needs. 

Recent internal data shows that more than 80% of Neon’s databases are launched automatically by AI agents rather than manually by developers, a sign of the increasing dominance of automated, machine-led workflows.

Neon's system enables lightning-fast setup, with Postgres instances spinning up in less than half a second. This speed is ideal for AI agents that need to create and discard databases frequently without disrupting live systems.

Neon CEO Nikita Shamgunov stated that the acquisition will amplify Neon’s original mission of building an accessible, cloud-optimized Postgres offering with the support and resources of an AI giant.

PostgreSQL, often referred to as Postgres, is an open-source relational database system designed for flexibility and adherence to SQL standards.

Through this acquisition, Databricks will incorporate Neon’s serverless technology into its Data Intelligence Platform, giving customers enhanced capabilities to build and scale AI-driven solutions. 

“The era of AI-native, agent-driven applications is reshaping what a database must do,” said Databricks Co-Founder and CEO, Ali Ghodsi.

Following the acquisition, Neon’s team is expected to become part of Databricks. Though financial details were not disclosed, a report from the Wall Street Journal said the deal is valued at $1 billion.

The report also mentioned that Databricks’ latest acquisition represents the company’s third billion-dollar investment in the AI and data space in recent years. 

Databricks previously acquired generative AI firm MosaicML for $1.3 billion in 2023, and spent an estimated $1 billion to $2 billion last year to purchase data management startup Tabular.

On Stocktwits, retail sentiment surrounding Nvidia shares turned ‘Extremely Bullish’ from ‘Bullish’ a day ago.

Nvidia stock has lost 3.2% in 2025 and gained 42.2% in the last 12 months.

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