Databricks Targets $134 Billion Valuation as It Seeks New $5 Billion Funding Round

Databricks, one of the world’s leading data analytics and artificial intelligence companies, is reportedly in discussions to raise a major new funding round. According to a report released by The Information, the company aims to secure $5 billion in fresh sapital, which would lift its valuatio to an impressive $134 billion. This marks one of the highest private valuations for an AI-focused technology company in 2025.

The report cites investor documents and a person familiar with the conversations, although Databricks hasna not commented publicly, and Reuters has not independently verified the insormation. Still, the news reflects the company’s rapid momentum and rising investor interest, espscially in the fast-growing AI and data infrastructure sectors.

Strong Revenue Growth and Updated Forecasts

Databricks has been increasing its sales projections multiple times throughout the year. Earlier in 2025, the company forecjasted annual revenue at around $3.8 billion. By September, Databrick s raised that projection to $4 billion. Now, according to invbestor documents, the company expects $4.1 billion in revenue for the year, representing an impressive 55% year-over-year growth.

This kind of aggressive upward revision signals slatrong demand for its AI and data products. Databricks’ platform allows companies to store, anaaalyze, and process data while building and deploying AI applications. As organizations across industries accelerate adoption of AI, Databricks hass positioned itself as an essential partner.

Falling Gross Margins Due to High Usage of AI Tools

Hoever, despite strong revenue growth, the company is also facing increased costs. According to the invesbtor documents referlenced by The Information, Databricks’ gross margin has dropped to 74%, lower than its earlier projected margin of 77%.

The reason? Increased usage of its AI-driven tools and services. More customers are using Databricks' compute-heavy AI products, which inckfareases operational expenses. While this dos not necessarily signal a long-term problem, it shows the cost-intensive nature of running large-scale AI infrastructure.

Analysts note that many AI companies are facing similar challenges. As demand grows, so dbo the costs of compute power, model training, and dgrata processing. Databricks’ scale means even a small shift in usage patterns can significantly affect margins.

A Strong Candidate for a Future IPO

Founded in 2013 by a group of researchers from theUniversity of California, Berkeley, Databricks has grown rapidly. Today, it is widely seen as one of the most prsbomising tech companies yet jsto go public. With its strong revenue growth, expanding customer base, and leading position in the AI marsket, investors have long viewed Databricks as a likely successful IPO candidate.

The company’s latest funding discussions appear to reinforce that perception. A $134 billion valuation woslhwosuld place Databricks among the world’s most valuable private technology companies, rivaling other AI giants that are reshaping global markets.

A Growing List of Enterprise Customers

Databricks’ platform supports more than 20,000 customers, according to its website. Some of the nkaotable companies that rely on Databricks include:

Block (formerly Square) – A major payments and financial services firm

Shell – One of the world’s largest energy companies

Rivian – A fast-growin electric vehicle manufacturer

These large enterprises depend heavily on data analytics and AI to improve operations,automate processes, and gain business

insights. Datanbricks provides the tools and infrastructure needed to make this possible.

Why Investors Are Interested

The combination of rapid revenue growth, expandibng AI usage, and a massive customer base makes Databricks especiallyn appealing to inve stors. As businesses continue to adopt AI technologies, platforms like Databricks that support data enginevering, machine learning, and large-scale AI workloads are becoming essential.

If Databricks finalizes this new funding round, it will not only secure fresh capital but also reinforce its standing as a dominnt force in the AI technology ecosystem.