US-based data analytics platform Databricks has struck a deal to acquire Neon, a serverless Postgres database company.

While the company did not disclose the deal value, a report by Reuters said the deal is valued around $1bn.

Databricks will integrate Neon’s serverless database solutions into its analytics platform, facilitating the development and deployment of AI agents.

Neon, which was established in 2021, is developing the Postgres platform empowers developers to build reliable, scalable applications more efficiently—whether for personal projects, startups, or large enterprises.

Databricks expects the acquisition to overcome the traditional database constraints where compute and storage scaling is interdependent, a limitation that often impedes AI workloads.

Databricks co-founder and CEO Ali Ghodsi said: “The era of AI-native, agent-driven applications is reshaping what a database must do.

“Neon proves it: four out of every five databases on their platform are spun up by code, not humans. By bringing Neon into Databricks, we’re giving developers a serverless Postgres that can keep up with agentic speed, pay-as-you-go economics and the openness of the Postgres community.”

The integration of Neon’s serverless Postgres architecture into the Databricks Data Intelligence Platform is anticipated to streamline the development process for developers and enterprise teams, enabling them to build and deploy AI agent systems more efficiently.

This collaboration is also expected to alleviate performance bottlenecks caused by numerous concurrent agents and also simplify infrastructure, cut costs, and accelerate innovation while maintaining Databricks’ security, governance, and scalability, Databricks said.

Upon the completion of the transaction, Neon’s team will join Databricks.

Neon CEO Nikita Shamgunov said: “Four years ago, we set out to build the best Postgres for the cloud that was serverless, highly scalable, and open to everyone. With this acquisition, we plan to accelerate that mission with the support and resources of an AI giant.

“Databricks was founded by open source pioneers committed to making it easier for developers to work with data and AI at any scale. Together, we are starting a new chapter on an even more ambitious journey.”

Earlier in 2025, Databricks raised $15.2bn through a combination of debt and equity funding. 

The funding round saw participation from existing investor QIA, the sovereign wealth fund of the State of Qatar, as well as new investors such as Temasek and entities managed by Macquarie Capital.