Snowflake expands AI capabilities with $250 million Crunchy Data deal
Investing.com -- Snowflake Inc (NYSE:SNOW) will acquire Crunchy Data for roughly $250 million, according to a report from the Wall Street Journal citing people familiar with the matter, as the cloud data firm expands its footprint in artificial intelligence. The deal is a strategic move aimed at capturing enterprise demand for AI agents tailored to specific datasets, and markets have responded, sending Snowflake stock up 2% ahead of close.
The acquisition puts Snowflake in more direct competition with Databricks, which recently acquired Neon in a $1 billion transaction. Both moves reflect a broader industry trend toward consolidating database technology to power next-generation AI tools.
Crunchy Data offers a managed PostgreSQL database platform used by large enterprises and U.S. government agencies to streamline infrastructure management. Through the acquisition, Snowflake plans to fold Crunchy into a new offering called Snowflake Postgres, according to the company.
Around 100 employees from Crunchy Data are expected to join Snowflake as part of the deal, which is anticipated to close in the coming weeks. Snowflake Postgres is intended to serve as a key layer for developers running AI applications directly on their enterprise data.
Snowflake's push into AI-ready infrastructure reflects broader efforts to position itself against tech giants like Nvidia (NASDAQ:NVDA) and OpenAI. These efforts align with Snowflake's prior acquisition of generative AI startup Neeva in 2023 for an undisclosed sum.
Snowflake has seen rapid adoption of its AI tools, with more than 5,200 customers now reportedly using its platform weekly for AI workloads. The company also surpassed $1 billion in quarterly revenue for the first time in the period ending April 30, beating analyst expectations.
Snowflake's platform continues to benefit from multicloud support across Amazon (NASDAQ:AMZN) Web Services, Microsoft (NASDAQ:MSFT) Azure, and Google (NASDAQ:GOOGL) Cloud, a factor that has fueled demand as organizations retire on-premise data systems. With the Crunchy Data acquisition, Snowflake further embeds itself in the backend infrastructure that enterprise AI development increasingly relies on.
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