Databricks Inc. today announced that it has raised more than $7 billion in equity and debt financing to accelerate its growth efforts.

The company first disclosed the investment late last year when it was still in the process of finalizing the financial terms. At the time, Databricks stated that it was raising more than $4 billion in equity funding. The equity component of the investment has since grown to more than $5 billion.

The deal size increased because JPMorgan Chase, one of the four lead investors in the round, boosted its contribution. In addition, Microsoft Corp. and several large financial institutions joined the raise. Databricks says that the transaction also included $2 billion in debt funding led by JPMorgan Chase, Barclays, Citi, Goldman Sachs and Morgan Stanley.

The company will use the funds to enhance its Genie and Lakebase products. Both offerings are important components of Databricks’ artificial intelligence strategy.

Genie is an AI assistant that enables workers to query data in Databricks’ platform using natural language prompts. A supply chain analyst, for example, could ask the tool to show how merchandise processing times vary across warehouses. Developers, meanwhile, can integrate Genie into external services using an application programming interface.

The AI assistant interacts with data in Databricks’ platform by generating SQL queries. To reduce the risk of errors, customers can provide Genie with pre-packaged SQL code for common requests. Queries tested ahead of time for bugs are less likely to return inaccurate results than code generated on an ad hoc basis.

Lakebase, the other focus of Databricks’ engineering push, became part of its product portfolio last year through a $1 billion startup acquisition. It’s a managed PostgreSQL database that doesn’t require developers to maintain the underlying infrastructure. According to Databricks, AI agents can use Lakebase to store configuration data and the information they incorporate into prompt responses.

The company disclosed in December that the service has thousands of customers. The same month, Databricks released a feature that enables Lakebase to scale to zero. That means instances can shut down completely when they’re not used, which avoids unnecessary hardware costs. Scale-to-zero features are technically difficult to implement, which is why many workloads consume limited infrastructure resources even when they’re idle. 

“With this new capital, we’ll double down on Lakebase so developers can create operational databases built for AI agents,” said Databricks co-founder and Chief Executive Officer Ali Ghodsi. “At the same time, we’re investing in Genie to let every employee chat with their data, driving accurate and actionable insights.”

The company disclosed today that its AI products’ annualized recurring revenue has increased from $1 billion in early December to $1.4 billion. Databricks’ overall run rate stands at $5.4 billion, a more than 65% increase from last year.

The software maker says that its sales momentum is partly driven by demand from its largest customers. More than 800 organizations spend at least $1 million on Databricks’ product per year. According to the company, 70 of those customers spend over $10 million.

In addition to enhancing its AI portfolio, Databricks will use its new funding to provide liquidity to employees. The company also plans to make acquisitions.

Photo: Robert Hof/SiliconANGLE