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October 23, 2023updated 24 Oct 2023 9:22am

Databricks to pay $100m for Arcion as it continues AI push

The vendor is building out its infrastructure so that it is ideal for training AI models. Arcion's technology will help.

By Matthew Gooding

Databricks is set to pay $100m for data replication start-up Arcion. The acquisition is designed to make it easier for the vendor’s customers to bring information from different enterprise databases into the Databricks Lakehouse platform.

Databricks has paid $100m for Arcion. (Photo by Celia Ong/Shutterstock)

California-based Arcion was founded in 2016 and has raised $18m from backers including Databricks’ own venture capital arm and HPE’s Pathfinder fund. It became Databricks’ first acquisition since a $500m funding round last month, which valued the privately-owned vendor at $43bn.

Why Databricks needs Arcion

Arcion’s technology will be incorporated into the Databricks Lakehouse Platform. A data lakehouse enables organisations to store and process information in one place by combining data storage and processing capabilities within a single architecture. This is supposed to enable faster data processing, which is useful for AI and machine learning applications.

With Arcion, Databricks is getting a system that can connect databases from some of the biggest enterprise software vendors, including Oracle, Salesforce and Snowflake. In total, Arcion offers connectors for more than 20 enterprise databases and data warehouses using its change data capture (CDC) engine.

It will be able to feed information from these sources into the lakehouse, and Databricks says the acquisition will enable it to “natively provide a scalable, easy-to-use, and cost-effective solution to ingest data” from cloud, on-premise and hybrid environments. The integration “will simplify ingesting such data either continuously or on-demand into the lakehouse, fully integrated with the enterprise security, governance, and compliance capabilities of the Databricks platform,” a company statement said.

According to Ali Ghodsi, co-founder and CEO at Databricks, to “build analytical dashboards, data applications, and AI models, data needs to be replicated from the systems of record like CRM, ERP, and enterprise apps to the lakehouse”.

Ghodsi continued: “Arcion’s highly reliable and easy-to-use solution will enable our customers to make that data available almost instantly for faster and more informed decision-making. Arcion will be a great asset to Databricks, and we are excited to welcome the team and work with them to further develop solutions to help our customers accelerate their data and AI journeys.”

Describing Databricks as a “great partner and investor” in his company, Gary Hagmueller, CEO of Arcion. “We are very excited to join forces to help companies simplify and accelerate their data and AI business momentum.”

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Databricks goes all in on AI

Like many enterprise IT vendors, Databricks is banking on AI to help it continue its growth. With many artificial intelligence models requiring vast amounts of training data, its services could be in high demand if more businesses adopt customised systems.

To that end, it acquired OpenAI competitor MosaicML in July for a reported $1.3bn and has made the code behind its own large language model, Dolly, available as an open-source package, so that businesses can use it as the basis for building their own AI systems. It is also said to be working with Microsoft to make a range of open-source models available on the tech giant’s cloud platform, Azure.

Databricks is likely to make further investments in its AI portfolio following its most recent funding round, which included backing from Nvidia, the GPU maker which provides the hardware used to train virtually all the world’s leading AI models.

“Databricks and Nvidia are building transformative AI technology, and we’re excited about the business value and innovation we can bring to our customers,” Ghodsi said at the time.

Read more: How the biggest companies wrote their own generative AI guardrails

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