Databricks Purchases AI Startup MosaicML For $1.3 Billion

Artificial intelligence (AI) continues to dominate the news headlines, with leading tech companies like Alphabet Inc.’s Google and Microsoft Corp. investing big money in the technology.

But it's not just the biggest names in tech leading the AI revolution. Venture capital investors and startups are also getting in on the action. AI startups have been at the top of the largest funding deals in the U.S. and continuing to take top spots. OpenAI, SandboxAQ and Stripe currently hold three of the top four spots of largest venture capital raises with a combing $17 billion raised. Retail investors have similarly begun investing millions into AI startups. Some of the largest raises in the equity crowdfunding space include $1.89 million raised by Snapify for their AI-photography solution and AtomBeam for their AI data compaction platform.

This trend doesn’t seem to be slowing down either with Databricks purchasing AI startup MosaicML.

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Details Of Databricks' Acquisition 

Databricks' acquisition of MosaicML for $1.3 billion is one of the most significant transactions of its kind within the AI space. 

The acquisition took place amidst the tech industry's growing focus on AI. As noted above, tech giants such as Google and Microsoft, along with venture capital investors, are heavily investing in AI startups​.

MosaicML, a San Francisco-based company, specializes in creating software tools that lower the cost of AI operations, particularly the training of AI algorithms using large data sets and high-end computer chips. The tools are sold to companies interested in developing custom AI systems.

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Databricks plans to merge its AI technology with MosaicML's language-model platform. The goal is to provide businesses with a quick, straightforward method to maintain control, security and ownership over their data without incurring high costs.

Databricks, a firm that also sells software tools for AI system construction, supports the use of open-source models. It argues that the models can compete with offerings from leading players such as OpenAI and Google. It should be noted that both Databricks and MosaicML have released open-source foundation models, a core technology behind services like OpenAI's ChatGPT.

MosaicML isn't new to AI. Established in 2021, the company has garnered $64 million in funding to date, with investors like Lux Capital and DCVC.

This is a prime example of the potential that the AI industry holds. Expect more transitions like this to become public in 2023 and beyond. 

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