Snowflake buys Crunchy Data to add more bite to its AI agents

Snowflake Inc. said today it’s buying a database startup called Crunchy Data Solutions Inc. in a $250 million deal that’s expected to close imminently, bolstering its agentic artificial intelligence capabilities.

Crunchy Data’s team of about 100 employees will join Snowflake once the deal closes and its technology wlll become the foundation of a new offering called Snowflake Postgres, the companies said.

The startup has developed a cloud-based database platform that makes it simple for businesses and government agencies to use PostgreSQL without having to manage the underlying infrastructure. PostgreSQL is an open-source relational database system that dates back to the 1980s. Although it’s old, the technology is enduring for it has become extremely popular with developers, thanks to the way it pairs perfectly with the Structured Query Language database language.

Crunchy Data was founded in 2012, and boasts hundreds of enterprise clients, including SAS Institute Inc., United Parcel Service of America Inc. and Moneytree Inc., as well as government agencies such as the U.S. Department of Homeland Security.

In a blog post on the eve of the company’s annual Snowflake Summit in San Francisco this week, Executive Vice President of Product Christian Kleinerman and Crunchy Data founder and Chief Executive Paul Laurence explained that the upcoming Snowflake Postgres platform will “simplify how developers build, deploy and scale agents and apps.” They were referring to AI agents, which are widely expected to become the next big thing after generative AI, taking actions on behalf of humans to automate complex work with minimal human supervision.

When it launches as a technology preview in the coming weeks, Snowflake Postgres will be an enterprise-grade PostgreSQL offering that will give developers the full power and flexibility found in the original, open-source Postgres database, together with the superior operational standards, governance, security and flexibility of Snowflake’s cloud data warehouse. According to Snowflake, it will help developers to speed up the development of new AI agents and simplify the way they access data.

“Postgres is truly amazing and it’s going to be right inside Snowflake,” said Snowflake CEO Sridhar Ramaswamy.

“Access to a PostgreSQL database directly within Snowflake has the potential to be incredibly impactful for our team and our customers, as it would allow us to securely deploy our Snowflake Native App, LandingLens, into our customers’ account,” said Dan Maloney, CEO of Snowflake customer LandingAI Inc. “This integration is a key building block in making it simpler to build, deploy and run AI applications directly on the Snowflake platform.”

Holger Mueller of Constellation Research Inc. said the deal cements the status of PostgreSQL as the “lingua franca” for accessing structured data. “Customers and developers will be pleased to see Snowflake supporting PostgreSQL, as it creates peace of mind that they can standardize their data access languages,” he said. “For developers, it also means being able to reach more databases and information sources with Snowflake.”

The deal will help Snowflake to keep pace with its biggest rival in the enterprise data space, coming just weeks after Databricks Inc. snapped up a similar Postgres database startup called Neon Inc. for about $1 billion. At the time, Databricks said the aim was to provide developers with a serverless Postgres that can “keep up with agentic speed, pay-as-you-go economics and the openness of the Postgres community.”

Snowflake’s cloud data warehouse platform enables enterprises to store, organize and analyze data across multiple cloud providers, including Amazon Web Services, Microsoft Azure and Google Cloud. It’s going head-to-head with Databricks, which provides many of the same capabilities, as both scramble to attract businesses that want to build AI agents and other apps that can utilize their own data.

The advantage of having a PostgreSQL offering is that it is flexible enough to be the underlying database for AI agents that leverage data from their respective cloud platforms.

Snowflake has been pushing heavily into AI tech for quite some time now, and in a recent earnings call it said more than 5,200 businesses are using its AI capabilities every week, including its family of Cortex large language models, which can serve as the basis of AI agents.

Data-focused startups have become popular acquisition targets in recent months. Last week, Salesforce Inc. said it’s going to pay $8 billion to snap up the decades-old data management company Informatica Inc. so it can leverage its capabilities for AI agents.

Also last month, the data intelligence firm Alation Inc. revealed it’s buying Numbers Station Inc. so it can build AI agents that can tap into structured data, while ServiceNow Inc. bought a startup called Data.World Inc. to bolster its own agentic capabilities.

Image: Snowflake