Prime Highlights:
Meta has invested in Databricks, a leading data analytics software startup.
The investment is part of a $10 billion funding round, increasing Databricks’ total venture funding to $14 billion.
Databricks collaborates with Meta on the Llama open-source large language models (LLMs), with involvement from Meta’s CEO Mark Zuckerberg.
Key Background:
Databricks, a leading data analytics software startup, announced on Wednesday that Meta has joined its roster of investors. This partnership is especially significant as Meta has been actively involved with Databricks in the development of Llama, an open-source large language model (LLM) that plays a central role in artificial intelligence research. According to Databricks’ CEO and co-founder, Ali Ghodsi, the collaboration between the two companies has reached the highest levels of management, with Meta’s CEO, Mark Zuckerberg, engaging in discussions about open-source software and the Llama project.
Meta’s investment in Databricks is part of a $10 billion funding round, marking one of the largest venture capital investments in recent history. This round has increased Databricks’ total venture funding to $14 billion. While Meta does not frequently invest in startups, the rapid growth and promising future of Databricks, which is approaching an initial public offering (IPO), made this collaboration a strategic move. The new capital will help fuel Databricks’ global expansion and provide liquidity options for current and former employees.
In addition to the investment, Databricks secured a $5.25 billion credit facility led by JPMorgan Chase. Ghodsi noted that a credit facility is often a better option than issuing stock, as it avoids diluting shareholder value, despite the high-interest rate involved.
Databricks’ $10 million investment in training its own LLM, DBRX, last year resulted in strong performance compared to Meta’s Llama and other models. However, with other models surpassing DBRX in capabilities, the company recognized the value of aligning with Meta, a leader in open-source model development. While Ghodsi did not disclose specifics on Meta’s investment amount or whether Meta is a client, he indicated that Databricks could potentially go public within the next year. The $10 billion funding round also saw participation from Qatar’s sovereign wealth fund, the Qatar Investment Authority.
