Why are investors pouring huge sums in enterprise AI?
The latest winner of the growing interest in enterprise AI is Databricks, a startup that has just secured $1.6 billion in series H funding at an insane valuation of $38 billion. This latest round of investment comes only months after Databricks raised another $1 billion.
Databricks is one of several companies that offer services and products for unifying, processing, and analyzing data stored in different sources and architectures. The category also includes Snowflake, which made a massive IPO last year and has a market cap of $90 billion, and C3.ai, which did a very successful SPAC IPO earlier this year.
Why are investors enamored with companies like Databricks? Because they are addressing some of the biggest challenges standing in the way of companies that are trying to launch machine learning projects to cut down the costs of operations, improve products and user experience, and increase revenue.
There’s a lot of excitement around what companies like Databricks can do for the enterprise AI market. But whether the huge valuation is justified or a byproduct of the hype surrounding the market remains to be seen. Given the structure of these companies and their business models, it’s not clear how they will continue to sustain the growth that investors expect and whether they can withstand the long-term and inevitable competition that tech giants will bring.
Read the full analysis on TechTalks.
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