Snowflake, a cloud-based data warehousing company, has agreed to acquire database startup Crunchy Data in an attempt to target customers seeking to build their own artificial intelligence agents. This deal is worth around $250 million, according to a Washington Street Journal report that cites persons familiar with the matter.
This deal is expected to close within a couple of weeks, leading to Crunchy Data’s roughly 100 employees to join Snowflake. Crunchy Data would be part of an offering called Snowflake Postgres.
“The vision here is that Snowflake Postgres will simplify how developers build, deploy and scale agents and apps,” said Vivek Raghunathan, senior vice president of engineering at Snowflake. “With that in mind, it was important to acquire a company that was not just engineered for quick experimentation.”
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Crunchy Base, which is a cloud-based database platform, helps large businesses and government agencies use PostgreSQL without needing to manage the infrastructure themselves. PostgreSQL is a popular open-source, relational database that dates to the late 1980s.
“Our vision is to deliver the world’s most trusted and comprehensive data and AI platform to our customers,” Raghunathan said in a press release provided to TechCrunch. “Today’s announcement of our proposed acquisition of Crunchy Data represents another reason why Snowflake is the ultimate destination for all enterprise data and AI needs. We’re tackling a massive $350 billion market opportunity and a real need for our customers to bring Postgres to the Snowflake AI Data Cloud.”
This deal is especially notable because it comes so soon after Snowflake’s rival Databricks purchased Neon, a similar database startup. The deal was valued at around $1 billion with Neon’s roughly 140 employees joining Databricks following its closure.
Like with Snowflake, Databricks’ acquisition also furthered goals to enable customers to build their own AI agents with Neon serving as the underlying database for customers. Databricks earns revenue by renting out its analytics capabilities, AI and other cloud-based software that tap into AI-ready data for building enterprise tech systems.
With its acquisition of Crunchy Data, Snowflake has not only joined Databricks but also big names like OpenAI and Nvidia in pursuing clients who want to build their own AI agents.
READ: Meta backs Databricks in a historic $15 billion funding round (January 23, 2025)
Of late, Snowflake has been investing heavily in research and development to better focus on AI-related clients. The company said more than 5,200 of its business customers are using its AI capabilities weekly. Snowflake reported quarterly revenue that topped $1 billion for the first time in its first quarter that ended on April 30 — higher than analyst expectations.
Snowflake offers a platform for storing, organizing and analyzing data across multiple cloud providers including Amazon Web Services, Microsoft Azure and Google Cloud. The company, which went public in 2020, grew rapidly during the pandemic as more companies migrated their data to cloud storage from on-premise data warehouses. In 2023, the company purchased Neeva, a startup that uses generative AI to search data.