On June 26, 2023 Databricks announced it had signed a definitive agreement to acquire MosaicML, a generative-AI platform, for approximately $1.3 billion inclusive of retention packages. MosaicML, co-founded and led by Naveen Rao, was known for its open MPT large language models - MPT-7B had been downloaded over 3.3 million times - and for training software that the companies said delivered “2x-7x faster training compared to standard approaches,” cutting the cost of training a large model from millions to thousands of dollars.
Databricks framed the goal as making generative AI accessible to every organization by letting customers “build, own and secure generative AI models with their own data” on its platform. Databricks announced it had completed the acquisition on July 19, 2023.
The deal was one of the largest AI startup acquisitions of the early generative-AI wave and reflected enterprise software vendors racing to give customers the ability to train private models on their own data rather than depend solely on closed APIs.
Why business readers should care: the MosaicML purchase shows the data-and-platform vendors betting that enterprises would want to own and customize their own models. Pricing in retention packages, it also illustrates how much of an AI acquisition’s value sits in the team rather than the product.