Databricks reported that its annual revenue reached $5.4 billion, up 65% from the previous year, with more than $1.4 billion of that revenue coming directly from its artificial intelligence products. Co founder and CEO Ali Godsi framed the disclosure as a response to concerns that artificial intelligence will “kill” the software as a service model, arguing instead that artificial intelligence is boosting product usage. On the same day, Databricks officially closed a previously announced $5 billion investment round that valued the company at $134 billion, and the startup also secured a $2 billion line of credit.
Databricks remains best known as a provider of cloud based data warehouses used for storing large volumes of data and running business analytics, but in private markets it is increasingly viewed as an artificial intelligence company. Godsi highlighted an artificial intelligence product called Genie, an interface based on large language models that lets users query data warehouses in natural language. He uses Genie to ask questions about data warehouse usage and the reasons revenue increased on specific days, tasks that previously required specialized query languages or dedicated reporting. Godsi said Genie is one of the main drivers of Databricks’ growing usage statistics and an example of how natural language interfaces are reshaping software as a service.
Godsi argued that the biggest risk to software as a service is not companies ripping out core “systems of record” to build their own artificial intelligence powered tools, since those systems handle critical data like sales, customer support, and finance and are difficult to migrate. Instead, he believes the main threat is that natural language interfaces, application programming interfaces, and plug ins for artificial intelligence agents will remove the need for users to become long term experts in specific products such as Salesforce, ServiceNow, or SAP, turning these products into invisible background utilities. He noted that millions of people have been trained on existing interfaces, calling that the strongest defensive moat, but warned that early adoption of large language model interfaces by software as a service startups can both accelerate their growth and open space for artificial intelligence native competitors. To address this shift, Databricks created a new database called Lakebase, designed specifically for artificial intelligence agents, and Godsi said that despite only being on the market for eight months, it has already generated twice as much revenue as Databricks’ classic data warehouse did in its first eight months. After closing the latest investment round, he added that Databricks has no plans for additional funding or an initial public offering in the near term, arguing that “this is not a good time to be a stock” and that a strong financial reserve gives the company time to execute over many years.
