Databricks and Microsoft $MSFT announced an expansion of their strategic partnership on Wednesday, extending the arrangement into the 2030s and deepening Databricks' commitment to the Azure cloud platform.
Databricks will run its own core business operations on Azure and expand its use of Microsoft's Arm-based Cobalt custom processors
Bloomberg / Getty Images
Databricks and Microsoft $MSFT announced an expansion of their strategic partnership on Wednesday, extending the arrangement into the 2030s and deepening Databricks' commitment to the Azure cloud platform.
Under the deal, Databricks will use Azure Databricks to run its own core business operations and analytics — the same platform it sells to enterprise customers. The company will also expand its use of Azure Cobalt, Microsoft's Arm-based custom processors, for data-intensive and agentic AI workloads. Databricks currently uses the Cobalt 100 chip and plans to adopt the Cobalt 200, which the companies said delivers up to 50% better performance and includes memory encryption enabled by default.
Microsoft will continue integrating Databricks' AI capabilities across its products, including Genie, Databricks' conversational analytics tool, and Unity AI Gateway, which governs models, agents, and costs. Those tools will be woven into the Microsoft ecosystem across products including Microsoft 365, Teams, Copilot, Power BI, and Microsoft Foundry, the companies said.
"With Databricks deepening its investment in Azure Databricks and Azure Cobalt-powered infrastructure, customers will benefit from greater performance, efficiency and scale for their most demanding workloads," said Judson Althoff, CEO of Microsoft's Commercial Business, in a statement. "Databricks' decision to run its own core business operations on Azure Databricks also gives customers confidence in a platform proven at enterprise scale."
Ali Ghodsi, co-founder and CEO of Databricks, said in a statement that the integration of Genie and Unity AI Gateway across Microsoft's products would help enterprises "unify their data and ground AI in business knowledge."
Thousands of organizations already use Azure Databricks, including Banco Bradesco, Electrolux, SMBC, and Unilever, the companies said. Databricks' platform is used by more than 20,000 organizations globally, including 70% of the Fortune 500.
The announcement is the latest in a series of cloud and AI infrastructure deals Microsoft has struck this week. Microsoft agreed to deploy AMD $AMD's Helios rack-scale AI system on Azure on Monday, and on Tuesday expanded its partnership with French AI startup Mistral, pledging billions to fund Mistral's data center growth in Europe and integrating Mistral models into Microsoft Foundry and Copilot Studio.
A funding round valuing Databricks at $188 billion was finalized last week and is expected to close before summer ends, according to Reuters.
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