Databricks and Microsoft extend strategic partnership into the 2030s

Databricks and Microsoft have announced an expansion of their decade-long strategic partnership, extending the alliance into the 2030s, with deeper Azure integration and tighter embedding of Databricks' AI capabilities across Microsoft's product suite.

Under the expanded arrangement, Databricks will run its own core business operations and analytics on Azure Databricks - using the same platform it sells to customers - and will broaden its use of Azure Cobalt, Microsoft's next-generation Arm-based infrastructure.

The company currently uses Cobalt 100 and plans to adopt Cobalt 200, which the companies said delivers up to 50% better performance and includes memory encryption enabled by default.

Microsoft, in turn, will continue integrating the Databricks Data and AI platform across its products, including bringing Genie - Databricks' AI co-worker - directly into customer workflows.

For partners and enterprise customers, the deal centres on grounding AI in business-specific data. Azure Databricks operates as a native Azure service, giving customers access to Genie and Genie Ontology for running agents on enterprise data, and Unity AI Gateway for governing models, agents and cost.

The platform is integrated across a broad set of Microsoft services, including Microsoft Entra, Azure Data Lake Storage, Microsoft OneLake, Power BI, Microsoft Purview, Microsoft Foundry, Power Platform, Microsoft 365, Teams and Copilot.

"With Databricks Genie and Unity AI Gateway deeply integrated across Microsoft's products, we're helping enterprises unify their data and ground AI in business knowledge," said Ali Ghodsi, co-founder and chief executive of Databricks.

"This lets customers get the full benefits of agents and models while controlling costs and ensuring governance."

"With Databricks deepening its investment in Azure Databricks and Azure Cobalt-powered infrastructure, customers will benefit from greater performance, efficiency, and scale for their most demanding workloads," Judson Althoff, chief executive of Microsoft Commercial Business,

"Databricks’ decision to run its own core business operations on Azure Databricks also gives customers confidence in a platform proven at enterprise scale.”