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Snowflake Bets Big on Open-Source Power with $250 Million Crunchy Data Acquisition

In a major strategic move to advance its artificial intelligence and data infrastructure offerings, Snowflake has announced its plan to acquire Crunchy Data, a cloud-native database startup, for approximately $250 million. The deal signals Snowflake’s deeper commitment to supporting AI-driven workloads and enterprise-grade open-source databases, particularly PostgreSQL — the world’s most-loved database according to the 2023 Stack Overflow Developer Survey.

Although financial details haven’t been officially disclosed, a person familiar with the matter confirmed the approximate value of the acquisition, which is expected to close in the coming months.

Why Crunchy Data Matters in the AI-Powered Cloud Race

Founded in 2012 and headquartered in Charleston, South Carolina, Crunchy Data has made a name for itself by offering a secure, scalable version of PostgreSQL in the cloud. The company’s flagship product — a hardened, enterprise-ready PostgreSQL service — includes advanced security features, performance optimizations, and high-availability support.

Crunchy Data currently serves over 100 enterprise clients, including major names like UPS, Kyndryl, Thales, and even the U.S. Department of Homeland Security. Backed by venture firms like Alsop Louie Partners, Gray Ventures, Harbert Growth Partners, and Heavybit, the company now generates over $30 million in annualized revenue, according to internal estimates.

Snowflake’s Strategic Push Toward AI and Open Source

Snowflake is actively building toward a future centered around agentic AI — autonomous artificial intelligence systems that perform complex tasks independently. CEO Sridhar Ramaswamy emphasized this direction in a May earnings call, stating:

“We’re helping our customers build a strong foundation to lead in the era of agentic AI.”

By incorporating Crunchy Data’s PostgreSQL platform into its offerings, Snowflake aims to simplify the process of migrating structured data into Snowflake’s ecosystem — enabling users to run AI-powered queries and analytics at scale with less friction.

Christian Kleinerman, Snowflake’s EVP of Product, explained that the company will soon release early access to its PostgreSQL-based services to offer customers more flexible data operations, enhanced cross-platform compatibility, and faster onboarding.

Competitive Pressures: Databricks, PostgreSQL, and the Cloud Database Wars

Snowflake’s acquisition of Crunchy Data comes just weeks after rival Databricks announced its own deal to acquire Neon, another PostgreSQL-focused startup, in a transaction reportedly worth $1 billion.

Interestingly, Snowflake had previously explored acquiring Neon but walked away from negotiations, according to sources close to the matter. Instead, it opted for Crunchy Data, which already has a solid customer base, $30M+ in ARR, and a 12-year track record in the enterprise open-source space.

With both Databricks and Snowflake doubling down on PostgreSQL capabilities, the competition to dominate the cloud-native, open-source database market is intensifying — particularly as corporations ramp up investment in infrastructure for AI-powered applications.

Market Performance and Analyst Outlook

Snowflake shares have surged approximately 36% year-to-date, bolstered by a strong fiscal performance and positive analyst sentiment. In May, analysts at Stifel likened Snowflake’s consistency to that of golf superstar Scottie Scheffler, praising the company’s 25% year-over-year revenue growth and labeling its recent quarterly report a “Scheffler-like quarter and guide.”

Stifel maintains a buy rating on the stock, citing Snowflake’s continued execution, growing product ecosystem, and now, its increased leverage in the open-source and AI integration space.

What This Means for the Future

With this acquisition, Snowflake isn’t just adding a database product — it’s signaling its commitment to the future of open source, cloud-native infrastructure, and AI-first enterprise ecosystems. The PostgreSQL market has exploded in recent years due to its extensibility, reliability, and strong developer support — and Snowflake is making a calculated bet to own a piece of that momentum.

As businesses increasingly demand tools that are flexible, scalable, and AI-ready, Snowflake’s integration of Crunchy Data could prove to be a defining move in the next phase of cloud data evolution.