Meta Platforms joined a mega-sized venture funding round for the AI unicorn Databricks, the startup said on Wednesday. Meta stock gained during a strong day overall for stocks.
The San Francisco-based Databricks announced it has closed a $10 billion Series J venture investing round, with an additional $5.25 billion in debt financing. The firm added that Meta had joined as a new strategic investor. The deal valued Databricks at $62 billion, according to the company announcement.
Databricks announced the venture funding in December but did not announce the debt financing or Meta's involvement at the time. Nvidia joined a 2023 investment round for Databricks in a similar strategic advisor role.
In an interview with CNBC, Databricks Chief Executive Ali Ghodsi said that Meta's open-source Llama AI models "completely changed the landscape" for AI with thousands of customers using the large language models.
"We started partnering closely with (Meta) then to give the feedback on how these enterprises were using it," Ghodsi told CNBC on Wednesday. "And that's where the partnership started, and it made sense to just deepen it with an investment here."
Meta Stock: AI Push In Focus With Earnings Due
For Meta, the investment is the latest in a broader push to be a leader in AI technology. Chief Executive Mark Zuckerberg has defended Meta's open-source approach to investors by noting the importance of being a leader in a red-hot technology trend.
Meta will report fourth-quarter earnings on Jan. 29. Meta gained 1.1% on the stock market today to close at 623.50. Shares are up 7% so far this year and are approaching a 638.40 flat base buy point, according to MarketSurge.
Databricks said it will use the funding "toward new AI products, acquisitions, and expansion of its international go-to-market operations." Founded in 2013, Databricks offers cloud-based AI technology that helps companies and organizations manage and draw valuable insights from data.
With its growing valuation, the company regular target for IPO speculation. But the firm has not made any formal moves toward going public yet.
"We're certainly ready as a company: The way we're operating, the way we're doing our audits, the way our financials are, the CFO, the board structure," Ghodsi told the Wall Street Journal last March. "So we'll make a strategic decision whenever that time comes."
