How Databricks and Microsoft Are Scaling Enterprise AI

Earlier this week, Databricks, the cloud-based data intelligence and AI platform, confirmed strategic funding that takes its valuation to an astronomical US$188bn.

Building on its sky-rocketing growth, Databricks announced an expansion to its existing partnership with Microsoft, extending into the 2030s.

“The next generation of AI will be defined by how effectively organisations turn their unique knowledge into intelligence,” says Judson Althoff, CEO of Microsoft Commercial Business.

The expanded partnership will see increased integration of Databricks Genie and Unity AI Gateway into the Microsoft ecosystem. 

Databricks expands partnership with Microsoft

The company’s expanded partnership is built around advancing deeper integration of both companies' products and services. 

Databricks deepens its bet on Azure, growing its use of Azure Databricks to run its own core business operations and analytics, while both companies advance native integration across the Microsoft stack, including Databricks Genie and Microsoft 365

Judson adds: “Microsoft and Databricks are helping customers connect data, AI and business context to accelerate decision-making and drive measurable impact. 

“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. 

“Databricks’ decision to run its own core business operations on Azure Databricks also gives customers confidence in a platform proven at enterprise scale.”

A partnership that is stronger than ever

“For nearly a decade, Databricks and Microsoft have helped enterprises innovate with data and AI,” says Ali Ghodsi, Co‑Founder and CEO of Databricks.

“Today, our partnership is stronger than ever. With Databricks Genie and Unity AI Gateway deeply integrated across Microsoft’s products, we’re helping enterprises unify their data and ground AI in business knowledge.

“This lets customers get the full benefits of agents and models while controlling costs and ensuring governance.”

As part of the expanded partnership, Databricks will increase its use of Microsoft Azure Cobalt to improve performance and efficiency. 

Databricks currently uses Cobalt 100 and plans to adopt Cobalt 200, which delivers up to 50% better performance and includes memory encryption enabled by default.

The next evolution of Genie

Building on the relationship, Microsoft will continue integrating Databricks Data and AI platform across its products, bringing capabilities like Genie, which is Databricks’ AI co-worker, directly into customer workflows.

At its recent DATA + AI SUMMIT in San Francisco, Databricks announced Genie One, which it describes as the next evolution of Genie. 

While the first generation of Genie only provided conversational analytics on data stored in Databricks, Genie One now connects business users to all their data in both Databricks and a wide range of connected applications.

Rich Radley, Databricks' EMEA VP of Field Engineering, spoke to AI Magazine in a Q&A published earlier this week about how Genie One can shift the balance and speed up innovation. 

Rich said: “For me, democratizing data isn't just about making information easier to access; it's about giving more people the ability to turn ideas into action. 

“Too often, the people who understand the business best still have to rely on technical teams to answer questions, build reports or test new ideas. That slows innovation down. 

“Genie One helps shift that balance by putting AI into the hands of more employees, enabling them to explore information, automate routine work and make better-informed decisions without needing deep technical expertise.”