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Databricks locks in one of the largest private funding rounds in tech

Databricks has closed a massive $5 billion funding round, alongside securing an additional $2 billion in new debt capacity, valuing the company at an eye-catching $134 billion. The deal ranks among the largest private capital raises in the history of enterprise software and underscores investor confidence in companies positioned at the intersection of data infrastructure and artificial intelligence.

The company confirmed the funding round on Monday, reinforcing its status as one of the most valuable privately held technology firms globally.

Revenue growth accelerates as cash flow turns positive

Databricks also reported that its annualized revenue surpassed $5.4 billion in the January quarter, representing a 65% increase year over year. Notably, the company generated free cash flow over the past 12 months, a milestone that many high-growth software firms struggle to reach at this scale.

Just months earlier, in mid-2025, Databricks had projected roughly 50% annual growth. The latest figures indicate that momentum has accelerated, driven largely by enterprise demand for AI-ready data platforms.

AI emerges as a major revenue engine

Artificial intelligence has become a core growth driver for Databricks. The company said AI-related products now contribute approximately $1.4 billion in annualized revenue, reflecting rapid adoption by large enterprises looking to operationalize generative AI.

Databricks enables customers to unify data, analytics, and AI models in a single platform, allowing businesses to build custom AI agents, deploy large language models, and query massive datasets in real time. As enterprises move from AI experimentation to production, demand for this infrastructure has surged.

IPO remains an option, but not a necessity

Despite the strong financial performance and investor enthusiasm, Databricks is in no rush to go public.

CEO and co-founder Ali Ghodsi said the company is prepared for an initial public offering “when the time is right,” but emphasized that remaining private remains a viable path if public market conditions remain volatile.

With billions of dollars in fresh capital and debt capacity on its balance sheet, Databricks has the flexibility to fund expansion, product development, and strategic acquisitions without relying on public markets.

Investor lineup signals long-term confidence

The funding round attracted a heavyweight roster of institutional investors, including Goldman Sachs, Morgan Stanley, Glade Brook Capital, Neuberger Berman, and the Qatar Investment Authority. JPMorgan led the debt financing portion of the transaction.

Ghodsi noted that demand exceeded expectations, with interest intensifying in recent weeks as investors sought exposure to profitable, high-growth AI infrastructure companies. He also acknowledged that shifts in equity markets can take months to be reflected in private valuations.

Pulling ahead of public-market rivals

Databricks now dwarfs some of its closest publicly traded competitors. Rival Snowflake reported $1.21 billion in revenue for its most recent October quarter and currently carries a market capitalization of around $58 billion, less than half of Databricks’ private valuation.

With the recent broad release of Lakebase, Databricks has expanded beyond analytics deeper into the operational database market, placing it in more direct competition with long-established enterprise software giants such as Oracle and SAP.

Market volatility creates opportunity

The broader software sector has faced pressure, with shares of Oracle and Snowflake falling roughly 13% last week amid concerns over increased competition from open-source and AI-native tools. Some investors worry that emerging AI platforms, including productivity tools powered by large language models, could erode the dominance of traditional software vendors.

Ghodsi pushed back against that narrative, calling the selloff an overreaction. While competitive moats may be narrowing, he argued that leading platforms with deep enterprise integration are far from being displaced.

From startup to industry cornerstone

Founded in 2013, Databricks has evolved from an Apache Spark–focused startup into a central player in enterprise data and AI infrastructure. The company ranked No. 3 on CNBC’s 2025 Disruptor 50 list, reflecting its influence across cloud computing, analytics, and artificial intelligence.

With record funding, accelerating revenue, and growing AI adoption, Databricks enters 2026 with significant leverage over its future—whether that leads to a blockbuster IPO or continued dominance as a private tech giant.