Databricks has agreed to acquire Neon, an open-source database startup specializing in serverless Postgres, in a deal valued at approximately $1 billion. The acquisition aims to enhance Databricks' analytics platform by integrating Neon’s technology, which supports AI-native infrastructure and agent-based workloads. Neon’s database services are notably spun up by AI in 80% of cases, highlighting its alignment with AI-driven applications. Founded four years ago, Neon has raised about $130 million in venture funding from investors including Microsoft’s M12 and Menlo Ventures. Databricks CEO Ali Ghodsi emphasized that this acquisition is a strategic move to control the database layer crucial for the future of artificial intelligence and agentic AI workloads. The deal reflects Databricks’ ongoing expansion in the AI and cloud infrastructure space, positioning it to accelerate the development and deployment of AI agents across enterprises over the coming years.