Databricks started out as a big-data company - software that helps businesses store and analyze information in the cloud. But as companies started demanding AI tools that could handle sensitive data securely, Databricks saw an opening.
It used its existing infrastructure to build new AI products like Lakebase, Unity, and Omnigent. And it made a smart cost-cutting move: instead of relying only on expensive proprietary models from companies like OpenAI and Anthropic, Databricks started using cheaper open-weight models. One example is GLM 5.2 from a Chinese company called Z.ai.
According to internal benchmarks provided by CEO Ali Ghodsi, open-weight models, especially GLM 5.2, perform exceptionally well on the most demanding coding tasks while costing significantly less than proprietary alternatives. Additionally, Databricks discovered that the selection of a harness - an agentic coding tool that works with a model - also affects overall expenses. The open-source harness Pi proved to be among the top performers in context management and one of the most affordable options, maintaining quality.
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The numbers tell the story of a company that has ridden the AI wave hard. In December 2024, Databricks was valued at $62 billion after a $10 billion raise. By September 2025, that jumped to $100 billion after a $1 billion raise. Then in February 2026, it raised $5 billion at a $134 billion valuation.
Now the new round led by Coatue pushes the number to $188 billion. That is more than triple the valuation since December 2024, a year‑and‑a‑half of fundraising.
The catch: the money hasn't arrived yet. The round is expected to close later this summer, and Databricks has not confirmed the exact amount. A VC told TechCrunch, "The deal is solid, with so many firms wanting in that the company had no reason to keep its new valuation a secret."
Investors see a company that successfully rebranded itself as an AI provider, not just a data storage firm. That repositioning matters because AI is the hottest ticket in tech right now.
The broader trend here is bigger than one company. AI enthusiasm is so strong that it is lifting valuations even for businesses that have nothing to do with the technology. For evidence, look at the sandwich chain Jersey Mike's, which brought up AI 22 times in its IPO filings.
Databricks CEO Ali Ghodsi manages a team of 3,000 software engineers. Over the past 18 months, the company has raised multiple funding rounds, prompting jokes about exhausting the alphabet for round names. The valuation jump from $62 billion to $188 billion in that period shows where the money is flowing in tech.
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