SF tech firm Databricks to buy MosaicML for $21 million per worker
Databricks, a decade-old data analytics company based in San Francisco, has agreed to purchase the artificial intelligence startup MosaicML for $1.3 billion.
The startup, also based in the city, was founded just two years ago and has only 62 workers. This deal, announced Monday, will see Databricks cough up $21 million per MosaicML employee. It’s a valuation born of the artificial intelligence craze, in which new startups are raising lofty funding rounds and software stalwarts are shelling out cash to keep themselves close to the cutting edge.
The $1.3 billion deal includes “retention packages” for employees, Databricks' news release said.
The deal marks a huge investment in generative AI for Databricks, which grew out of a project at UC Berkeley, to become a data storage and analytics giant that, as of 2022, was worth $31 billion. The 5,500-worker company handles data for massive companies like AT&T, Shell and Walgreens, according to its website. MosaicML brands itself as a platform for companies looking to cheaply and quickly build their own AI models.
Since the beginning of the year, Databricks CEO Ali Ghodsi told SFGATE, Databricks has been hearing from its customers that they’d like the ability to build their own generative AI models. He pointed to San Francisco-based Replit as an example of a firm that has already used Databricks for data processing together with MosaicML’s platform to cheaply build an AI model.
Databricks will take on the startup’s entire workforce, according to a news release, if the transaction closes according to plan. Ghodsi said his firm has a very high bar for hiring but that he’s long been impressed by MosaicML’s workers.
“Most acquisitions don’t make sense for us because we know that there’ll be a cultural clash after we join forces,” Ghodsi said. “Mosaic was one that we immediately, from the get-go, felt like the quality of the talent and the culture that they have and the way we think about things is almost identical.”
“We are very, very bullish on bringing them in and making them successful here within the company,” he added. “That’s gonna be a top priority for us, absolutely.”
Databricks has 30 offices around the globe but is headquartered in San Francisco and has a large office in Mountain View. MosaicML has offices in San Francisco, Palo Alto, New York and San Diego.
Ghodsi said that San Francisco’s booming AI scene is an exciting prospect after large tech companies cut office space and employees moved out of the city over the past few years.
“There is this amazing revival happening around AI and ML,” he said. “… I think this is a great time to actually invest in San Francisco, when everybody else is down on it.”
Hear of anything happening at Databricks, MosaicML or another tech company? Contact tech reporter Stephen Council securely at stephen.council@sfgate.com or on Signal at 628-204-5452.
Source: SFGATE
