Databricks announced Monday that its revenue rose 65% year-over-year to $5.4 billion, with more than $1.4 billion of that coming from its AI products.
Co-founder and CEO Ali Ghodsi told TechCrunch that there’s been a lot of talk about how AI will disrupt SaaS businesses, so he wanted to share these growth numbers.
“Everyone is thinking, ‘Oh, this is SaaS. What’s going to happen to these companies? What is AI going to do for these companies?’ For us, it’s just going to increase usage,” he said.
Indeed, he also wants to move Databricks away from the SaaS label, given that the private market values Databricks as an AI company. Databricks on Monday officially closed on its previously announced mega-$5 billion raise at a valuation of $134 billion, and also secured a $2 billion financing facility.
But the company straddles both worlds. Databricks is still best known as a cloud data warehouse provider. A data warehouse is a place where companies store large amounts of data to analyze for business insights.
Ghodsi specifically highlighted one AI product that is facilitating the use of data warehouses: an LLM user interface called Genie.
Genie is an example of how SaaS businesses can replace user interfaces with natural language. For example, he uses this to ask why warehouse usage and revenue spike on certain days.
Just a few years ago, such requests required writing queries in specific technical languages or programming special reports. Today, Ghodsi says anyone can use a product with an LLM interface. Genie is one of the reasons for the company’s increased usage, he said.
The threat of AI to SaaS is not that companies will scrap their SaaS “system of record” and replace it with a vibe-coded homegrown version, as one AI VC jokingly tweeted. Systems of record store important business data such as sales, customer support, and finance.
“Why move a system of record? You know, it’s hard to move that,” Godi said.
In any case, the model manufacturer does not provide a database to store that data and serve as a system of record. Instead, they want to replace the user interface with natural language for human consumption, or with APIs and other plugins for AI agents.
So the threat to SaaS businesses is that people no longer spend their careers becoming masters of a particular product (Salesforce Specialist, ServiceNow, SAP), Ghodsi says. When the interface becomes just a language, the product becomes as invisible as plumbing.
“Millions of people around the world have been trained on those user interfaces, and that’s been the biggest moat those companies have,” Godi warned.
SaaS companies that adopt the new LLM interface, like Databricks, are likely to grow. But this also opens up the possibility for AI-native competitors to offer alternatives that work better with AI and agents.
That’s why Databricks created the Lakebase database designed for agents. He’s feeling some early traction. “In eight months after going to market, we’ve doubled the revenue that our data warehouse was making at eight months. Of course, that’s like comparing infants,” Ghodsi says. “But this is an infant twice the size.”
Meanwhile, now that Databricks has completed a major funding round, Ghodsi said the company is not immediately working on raising more money or preparing for an IPO.
“This is not the best time to go public,” Gody said. “We just really wanted to be fully capitalized” if the market went “south” again, as it did during the 2022 recession, when interest rates spiked after years of near-zero interest rates. A deep bank account “protects us and gives us runway for years,” he added.
