Are Snowflake and Databricks Overpaying for Database Startups?

Snowflake is about to spend $250 million on Crunchy Data, which generates just over $30 million annually. Databricks, meanwhile, dropped about $1 billion on Neon—probably with even less revenue—followed by a $1 billion–$2 billion deal for Tabulr simply to keep it out of Snowflake’s hands. Both companies claim these buys are strategic for “agentic AI,” but the underlying reality is much more cynical. These multibillion-dollar checks serve as a brutal display of one-upmanship that punishes common sense. Snowflake’s Crunchy Data Gamble At first glance, Snowflake’s $250 million acquisition of Crunchy Data seems reasonable. Crunchy Data provides a hardened, cloud-hosted PostgreSQL distribution with security and performance tweaks. Snowflake can integrate it into a managed