The Swedish-trained computer scientist leads Databricks as CEO.
(Photo: © 2019 Bloomberg Finance LP)
San Francisco The AI specialist Databricks has managed to secure a remarkable round of financing despite difficult conditions. The US company has raised more than $500 million from lenders such as the world’s most valuable chip company, Nvidia, as the company announced a few days ago.
At a time when the valuation of many startups is crumbling and financing is stalling, Databricks was able to increase its valuation to $43 billion. In the last financing round in August 2021, the company was valued at $38 billion.
Databricks is considered a candidate for an IPO. But CEO Ali Ghodsi is in no hurry. He told the Handelsblatt that he sees his company in a good position: “We are not under pressure.”
Databricks is benefiting from the boom in investments in artificial intelligence (AI). The company specializes in data analysis. It offers a platform called Lakehouse that combines data management, analytics and AI functions in one system. This enables companies to manage their data and gain insights even from large amounts of data.
Customers such as the driving service provider Uber use Databricks’ software to determine the price for a route based on expected demand. Fashion retailer H&M uses the system to offer customers precisely tailored clothing or to make concrete predictions for future sales in individual stores or divisions.
Databricks maintains a research center in Germany
Important partners include SAP. In an interview with Handelsblatt, CEO Scott Russell named Databricks, along with Microsoft and Google, as one of the DAX group’s important partners in the field of artificial intelligence. SAP integrates American solutions into its own offering for customers.
Germany is important for Databricks. The company maintains a research center in Berlin and has several locations in Munich, Frankfurt and Cologne, among others.
In July, Databricks bought the AI start-up MosaicML for $1.3 billion, which competes with OpenAI, the company behind the text robot ChatGPT. “Thanks to MosaicML, we can build truly open AI models,” Ghodsi said in an interview. While OpenAI keeps its models secret, Databricks will make its efforts in the area of artificial intelligence public – the approach is called open source.
As a non-listed company, Databricks discloses little information about its business and financial condition. The portal “The Information”, known for investigative research in the US technology sector, published an article a few days ago after Databricks bought increasing market shares with high losses.
Citing insiders, the portal reported that Databricks’ loss in the current financial year would amount to $430 million. For the financial years 2022 to 2025, the loss totals $1.5 billion.
The high loss should be offset by a strong increase in sales. “The Information” reported internal forecasts according to which Databricks could achieve sales of $1.6 billion in the current fiscal year, which would correspond to an increase of around 50 percent compared to the same period last year.
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