Databricks announced its intent to acquire Neon, a leading serverless Postgres company. Neon’s serverless PostgreSQL approach separates storage and compute, making it developer-friendly and AI-native. It also enables automated scaling as well as branching in an approach that is similar to how the Git version control system works for code. Amalgam Insights CEO and Chief Analyst Hyoun Park noted that Databricks has been a pioneer in deploying and scaling AI projects. Park explained that Neon’s serverless autoscaling approach to PostgreSQL is important for AI because it allows agents and AI projects to grow as needed without artificially coupling storage and compute needs together. He added that for Databricks, this is useful both for agentic use cases and for supporting the custom models they have built over the last couple of years after its Mosaic AI acquisition. For enterprises looking to lead the way in AI, this acquisition signals a shift in infrastructure requirements for successful AI implementation. What is particularly insightful, though, is that the ability to rapidly spin up databases is essential for agentic AI success. The deal validates that even advanced data companies need specialized serverless database capabilities to support AI agents that create and manage databases programmatically. Organizations should recognize that traditional database approaches may limit their AI initiatives, while flexible, instantly scalable serverless solutions enable the dynamic resource allocation that modern AI applications demand. For companies still planning their AI roadmap, this acquisition signals that database infrastructure decisions should prioritize serverless capabilities that can adapt quickly to unpredictable AI workloads. This would transform database strategy from a technical consideration to a competitive advantage in delivering responsive, efficient AI solutions.