Databricks is in discussions to secure funding that could value the company at as much as $175 billion.

      **TL;DR** Databricks is negotiating to raise funds at a valuation of $165-$175 billion, just four months after reaching a $134 billion valuation. CEO Ghodsi has hinted at a potential IPO next year. The discussions are still in the early stages, and the funding round has not yet been finalized.

      According to a report from The Information on Monday, Databricks is in talks to initiate a new funding round with a valuation set between $165 billion and $175 billion. This new round could commence as early as next month, representing an increase of 23% to 31% from the $134 billion valuation achieved in February.

      The February funding round was substantial, totaling approximately $5 billion, which included $2 billion in debt, making it one of the largest private fundraising efforts in the AI field. Databricks is looking to secure additional funding before fully utilizing the previous round's proceeds—a strategy that has become common among AI infrastructure companies aiming to solidify valuations ahead of public offerings.

      **The numbers**

      As of February, Databricks announced it had surpassed $5.4 billion in annualized revenue run rate, marking a 65% year-over-year growth. The company provides a data lakehouse platform that integrates data warehousing and lake functionalities, enabling enterprises to store, process, and analyze the extensive datasets required by AI models.

      At a valuation of $175 billion, the company would be valued at roughly 32 times its run rate. While this valuation may seem high by traditional software standards, it aligns with multiples seen for AI-related infrastructure companies in private markets.

      **IPO positioning**

      CEO Ali Ghodsi has privately communicated to investors that Databricks is likely headed for an IPO, potentially as soon as next year, as reported by The Information. A pre-IPO funding round at a valuation of $165 billion to $175 billion would establish a baseline for its public listing.

      Databricks finds itself in a competitive landscape for IPOs. OpenAI filed confidentially for an IPO this week, Anthropic did so last week, SpaceX is set to list on Thursday, and Bending Spoons filed on Monday. Should Databricks pursue a public offering in 2027, it would enter a market already populated by the largest AI IPOs on record.

      **What the raise signals**

      Seeking a 30% increase just four months after a $5 billion round is not indicative of a need for capital. It is more a measure to establish a high private-market benchmark prior to going public. The concern lies in the possibility that enthusiasm in private markets may not reflect in public market valuations. Currently, discussions are at an early stage, and the valuation range is subject to change. Databricks has not yet released any comments on this report.