Databricks hits $188bn valuation as AI demand reshapes enterprise tech
Data firm Databricks has reached a $188 billion valuation after a rapid pivot to AI, highlighting how European enterprises may soon adopt cheaper, open-source models to cut rising artificial intelligence costs.
Databricks announced a new funding round on Thursday led by Coatue that values the data firm at $188 billion. The round is expected to close later this summer and has been reported to be roughly $3 billion.
The valuation marks a rapid ascent for a company that raised a record-breaking $10 billion round at a $62 billion valuation in December 2024. It has since secured additional capital at $100 billion in September 2025 and $134 billion in February, driven entirely by its pivot to artificial intelligence.
Founded in 2013 as a cloud data analytics provider, Databricks found itself well-positioned when corporate demand for AI surged. Because European and global enterprises already used its software to store vast troves of proprietary data, the company could easily sell AI tools wrapped in the security and governance that corporate IT departments require. It has since rolled out products like Lakebase, a database built for AI agents, and Unity, an AI gateway.
More importantly for cost-conscious European businesses, Databricks has become a leading example of a major 2026 enterprise trend. The firm is championing affordable Chinese open-weight models over expensive proprietary software from Anthropic and OpenAI to control rising AI costs.
Last week, CEO Ali Ghodsi shared internal benchmarking from the company's 3,000 software engineers comparing AI models on actual programming tasks. The company concluded that "open models, and GLM 5.2 in particular, are now able to handle even the highest level of task difficulty" in coding, at a lower total cost than proprietary alternatives.
The results also highlighted that the "harness"—the agentic coding tool managing the model's context—equally impacts expenses. Databricks found that the open-source Pi harness was among the most cost-effective choices without sacrificing quality. "The lesson here isn’t that one harness is always cheaper or that native harnesses are worse," the post noted. "Instead, model choice is only one piece of the puzzle."
For investors and corporate buyers across Europe, Databricks' soaring valuation underscores a clear market shift. Capital is heavily rewarding infrastructure firms that can prove enterprise AI can be deployed effectively using open-source alternatives rather than premium-priced proprietary systems.
