This scenario recently played out with AI big-data company Databricks and its latest $5 billion raiseannouncedThursday, co-founder and CEO Ali Ghodsi (pictured above) told TechCrunch.
“We wanted to raise $1 billion, but then The Information printed this article saying that Databricks is doing a big fundraise. They did that in the middle of our conference. We were heads down with our conference, and we were not actually at all focused on fundraising,” Ghodsi recalled, referring to a conference that took place in June.
“As soon as that article went out, there was a long line of investors that started calling. My phone blew up. It was like the worst timing for us because we were busy with our conference,” he said.
It was an enviable problem that turned the news report into a self-fulling prophecy.
“The interest level was just insane. Just from this select group of investors that we looked at, there was $15 billion of interest,” he said.
When there’s that much desire to get into a deal, telling some long-term backers no is a recipe for hard feelings. Databricks decided to issue more stock, and in July, sent out a press release announcing it had closed its new round at a$188 billion valuation. (The company didn’t disclose at the time how much it had raised)
Why were they all so eager? Databricks seems like a sure bet.
Ghodsi said his company has hit $7 billion of annualized run rate revenue, which is currently growing at 80% and is cash-flow positive. Its core product, a cloud data warehouse, is $1.5 billion of that run-rate, and still growing at 100% year-over-year, he said.
Plus, Databricks has the magic AI pixie dust. It’s database for agents, Lakebase,launched in June, 2025, and has hit $100M revenue run-rate. Its AI chatbot tool Genie, that can do business analysis on the spot, “is insanely popular,” he said.
So, if the business is doing so well, why raise more capital? The company had already raised $20 billionover the past 20 months.
AI is expensive, Ghodsi said. Databricks has multi-billion dollar cloud commitments with all three of the major hyperscalers. On top of that, “AI research is very expensive,” he said, adding that the company has an AI research team of 100 people, a highly competitive area.
Plus, Databricks is shopping. “We do a lot of M&A.” Ghodsi said, referencing an acquisition the companyannounced this weekof Electric, the company that makes the lightweight Postgres database PGlite, a means for agents to spin up databases (terms undisclosed). In June, itbought AI cybersecurity company Panther; In March,it bought two startups.