Databricks in Advanced Talks to Acquire Open-Source Database Startup Neon for Around $1 bn

Data and AI powerhouse Databricks is in advanced discussions to acquire Neon, a startup known for its open-source database engine, according to sources familiar with the matter, Upstarts Media reported.

Four sources confirmed the ongoing negotiations, with two indicating the deal could be valued at approximately $1 billion. That figure may rise further once employee retention packages are included.

While some in the industry are treating the acquisition as a done deal, multiple sources cautioned that discussions are still active and could fall apart before finalization.

If completed, the acquisition would mark another strategic move by Databricks as it expands its ecosystem around data infrastructure and AI.

Last month, Databricks announced the acquisition of Fennel AI Inc., a startup focused on real-time feature engineering, for an undisclosed sum.

The move is aimed at enhancing Databricks’ Data Intelligence Platform by enabling more advanced, real-time data processing capabilities.

Fennel has built a modern, incremental compute engine designed to optimise data pipelines across batch, streaming, and real-time sources. This architecture ensures fresher and more efficient data, which is critical for training high-performance AI models.