Databricks overtakes Snowflake as AI bet delivers $5.4B revenue, 65% growth

What's the deal? Databricks has overtaken Snowflake in quarterly revenue after years of trailing its rival. The data platform now generates $120 million more per quarter than Snowflake — a reversal from two years ago when it lagged by $220 million.

Databricks recently raised over $7 billion, including $5 billion in equity at a $134 billion valuation. It crossed $5.4 billion in annualised revenue, growing over 65% year-over-year.

Snowflake, which went public in 2020 at a $70 billion valuation, now trades at around $58 billion. Growth has slowed to 29%.

Why now? AI changed everything. Databricks bet early on unstructured data — images, documents, audio, logs. This data was long considered too messy to query and too expensive to store usefully.

Then large language models arrived. The data enterprises couldn't use became the data they needed to train AI. Databricks had built the tools to process it.

Its AI products now generate $1.4 billion in annualised revenue. Snowflake's AI revenue sits at around $100 million — a 10x gap.

Databricks also invaded Snowflake's home turf. Its SQL product, a direct competitor to Snowflake's core warehouse business, grew from $100 million to $1 billion in under three years.

What could go wrong? Staying private at $134 billion creates pressure. Employees and early investors eventually need liquidity.

CEO Ali GhodsiDealroom has a profile for this one. Try Dealroom → says an IPO will come "when the time is right," but market volatility could delay it. Growth at this scale is hard to sustain.

Snowflake isn't standing still. It has signed AI partnerships with OpenAI and AnthropicDealroom has a profile for this one. Try Dealroom →, launched new products, and hired a new CEO with an AI mandate.

The signal: This rivalry reveals where enterprise software is headed. Control of the data layer — not just AI models — is becoming the most defensible position in the stack.

Databricks' lead reflects a broader shift: enterprises now view unstructured data as a strategic asset. The company that helps them unlock it wins the next decade.

At $5 billion in revenue each, both have scale. But Databricks' 65% growth versus Snowflake's 29% explains the 2x valuation gap. In the age of AI, growth rate still trumps everything.

Sources:
Tomasz Tunguz
Databricks
SaaStr
Foundation Capital
TechEchelon

Image: Databricks

B.S.