Databricks Acquires OpenAI Rival MosaicML

It's not just investors looking to snap up hot tech companies in the AI space, but these are also likely to spur a huge wave of M&A. Today, Databricks announced that it will pay $1.3 billion to acquire MosaicML, an open source startup with neural networks expertise that has built a platform for organisations to train large language models and deploy productive AI tools based on them. Prior to this, MosaicML had raised just under $64 million from investors including DCVC, AME Cloud Ventures, Lux, Frontline, Atlas, Playground Global and Samsung Next.

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Databricks Makes a Sound with This Investment

Notably, its last investor round value was just $222 million. That means it jumped 6x with the exit, an extraordinary price that really underlines how frothy the AI market is right now, as well as the demand for talent and technology in the space. Frothy, but only relatively speaking, considering rival OpenAI was valued at over $40bn in its last round from Microsoft. In this context, Databricks stole it here.

The agreement will see MosaicML become part of the Databricks Lakehouse Platform, providing productive AI tools alongside Databricks' existing multi-cloud offerings that include integration, storage, processing, governance, sharing, analytics and AI-related services. These days the world is buzzing about OpenAI and in particular the potential for where to apply the generative AI that OpenAI has popularised and made so accessible. But inevitably, the Microsoft-backed parent of ChatGPT is not operating in a vacuum, and others are emerging and growing to capitalise on the surge of interest in the space. MosaicML is no slouch in this regard. MPT-7B, the penultimate version of LLM, has been downloaded 3.3 million times.