Databricks picks up MosaicML, an OpenAI competitor, for $1.3B
Investors aren’t the only ones who want to get their hands on hot tech companies in the field of AI: It’s also likely to spur a big wave of M&A, too. Today, Databricks announced it will pay $1.3 billion to acquire MosaicML, an open source startup with neural networks expertise that has built a platform for organizations to train large language models and deploy generative AI tools based on them.
Prior to this, MosaicML had raised just under $64 million from investors that included DCVC, AME Cloud Ventures, Lux, Frontline, Atlas, Playground Global and Samsung Next.
Notably, its last investor-round valuation was just $222 million — meaning it’s leaped 6x with this exit, a remarkable price that really does underscore just how frothy the AI market is right now, as well as the demand for talent and tech in the space.
Frothy, but only relatively speaking, considering that competitor OpenAI was valued at upwards of $40 billion in its last round from Microsoft.
In that context, Databricks got a steal here.
The deal will see MosaicML become a part of the Databricks Lakehouse Platform, providing generative AI tooling alongside the Databricks’ existing multicloud offerings, which include integration, storage, processing, governance, sharing, analytics and AI-related services.
The world is abuzz these days about OpenAI, and specifically the potential for where to apply the generative AI that OpenAI has popularized and made very accessible.
But inevitably the Microsoft-backed parent of ChatGPT is not working in a vacuum, and others are emerging and growing to capitalize on the surge of interest in the space.
MosaicML is no slouch in that regard. The penultimate version of its LLM, MPT-7B, has had 3.3 million downloads.