The AI Splurge Continues As Snowflake Pile Drives $250 Million to Make Postgres Sexy (Or Die Trying)

The splurging continues. Snowflake just snapped up Crunchy Data, and if you have any illusions left about “AI infrastructure” being a mature market… first of all, I envy your innocence. In short, Snowflake, still high off its last earnings sugar rush (25% YoY revenue growth, Scottie Scheffler analogies and all), is now dropping a bigly $250 million on a 100-person South Carolina shop best known for making Postgres bearable for the kind of government agencies that think “database migration” is a national security threat.

(Source: Giphy) 

However, unlike some areas in life… it’s not the size that matters here. While Crunchy Data is smaller than most, these guys are the Postgres whisperers for UPS, SAS, and the U.S. Department of Homeland Security. Their entire business boils down to “what if open source was less of a panic attack?” And when it comes to Snowflake, that’s worth a quarter billion dollars. Why? Because they are so desperate to keep Databricks from eating its lunch that it’s vacuuming up anything with the word “Postgres” on its website. 

Translation: Snowflake needs to slap an “enterprise-grade” sticker on every possible database to keep the AI agent parade marching. Databricks just threw $1B at Neon for the same reason, Salesforce is gorging on Informatica, ServiceNow is hoarding Data.World, and the only thing scarcer than GPU clusters is a database company not being stalked by a Fortune 500 cloud executive. The difference here though, is that Crunchy Data actually makes money (north of $30M ARR), which is more than you can say for half the AI-adjacent API clown cars out there. 

(Source: CNBC) 

With that said, Snowflake's goal is to roll out “Snowflake Postgres,” because AI agents and LLMs are only as useful as the crusty, boring data you can feed them. And enterprise customers want the option to never think about databases again… just pay a subscription and let Snowflake’s engineers live on Red Bull and regret. Plus, getting Postgres native in the Snowflake cloud means more clients locked in, more workloads inside the walled garden, and less oxygen for Databricks, Google Cloud, or whatever new data platform Andreessen Horowitz is hawking this month. 

Oh, and it’s also yet another middle finger to anyone who thought cloud database consolidation was over. (If you’ve been keeping score: Snowflake wanted Neon, but Databricks got there first. Now this is the runner-up prize, but at least they didn’t have to pay a billion dollars for it.) Every acquisition press release these days leads with “AI agents,” but the real arms race is about whose stack can hoover up the most legacy SQL garbage at the lowest marginal cost. 

(Source: Giphy) 

As for Crunchy’s team, they get to cash out, dodge the next five open-source funding rounds, and hand off all the customer support hell to Snowflake’s account managers. Talk about living the dream. And yet, in the end… this isn’t just about AI, it’s an extension of it. It’s about making sure that no CIO ever has to explain to their board why their data is stuck in a 2015 Postgres cluster when all the cool kids are running LLMs in the cloud. That’s the cash cow here… and Snowflake is going full-send on it. 

Now obviously, only time will tell what the impact on revenue this will be for Snowflake, but it’s clear investors aren’t even sure either. Shares are barely up 0.80% over the past five trading days, with today’s price action slumping -0.54%. But then again, investors have yeeted shares 32.75% YTD, so I can only imagine the momentum is there to continue the moonwalking. Regardless though, do what you will with this information and place your bets accordingly. Until next time, friends…

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Stocks.News holds positions in Google as mentioned in the article.