Databricks and Microsoft have announced an expansion of their strategic partnership, extending their collaboration into the 2030s to help enterprises build AI systems grounded in their own business data and processes.
As part of the expanded partnership, Databricks will deepen its use of Azure Databricks to run its core business operations and build its unified lakehouse. The company will also leverage Azure Cobalt, Microsoft’s next-generation Arm-based infrastructure, to improve performance and efficiency for AI and data-intensive workloads.
Microsoft will continue integrating the Databricks Data and AI Platform across its products, bringing capabilities such as Genie, Databricks’ AI co-worker, directly into customer workflows. The companies said the collaboration is aimed at helping enterprises develop AI with stronger business context while maintaining governance, control and cost efficiency.
Ali Ghodsi, Co-founder and CEO, Databricks, said the partnership with Microsoft has helped enterprises innovate with data and AI for nearly a decade. He said the deeper integration of Databricks Genie and Unity AI Gateway across Microsoft’s products will enable organisations to unify their data, ground AI in business knowledge, manage costs and strengthen governance.
Judson Althoff, CEO, Microsoft Commercial Business, said the next generation of AI will depend on how effectively organisations convert their knowledge into intelligence. He said Databricks’ expanded investment in Azure Databricks and Azure Cobalt infrastructure will provide customers with improved performance, efficiency and scalability for demanding AI workloads, while the company’s decision to run its own core operations on Azure Databricks demonstrates confidence in the platform.
Databricks said it will run its own core business operations and analytics on Azure Databricks, using the same platform it provides to enterprise customers.
The company also plans to expand its use of Azure Cobalt infrastructure. It currently uses Cobalt 100 and intends to adopt Cobalt 200, which offers up to 50 per cent better performance and includes memory encryption by default.
The expanded partnership will further integrate Databricks Genie and Unity AI Gateway across Microsoft’s ecosystem, including Microsoft Entra, Azure Data Lake Storage, Azure security, Microsoft OneLake, Power BI, Microsoft Purview, Microsoft Foundry, Power Platform, Microsoft 365, Teams and Copilot. According to the companies, these integrations are designed to deliver governed, real-time data and AI capabilities within enterprise workflows.
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