Databricks CEO says SaaS isn’t dead, but AI will soon make it irrelevant

Source: TechCrunch

Databricks announced it has reached a $5.4 billion revenue run‑rate, growing 65 % year‑over‑year, with more than $1.4 billion coming from its AI products【https://www.databricks.com/company/newsroom/press-releases/databricks-grows-65-yoy-surpasses-5-4-billion-revenue-run-rate】.

Founder‑CEO Ali Ghodsi shared these numbers amid widespread speculation that AI will “kill” SaaS businesses. He told TechCrunch:

“Everybody’s like, ‘Oh, it’s SaaS. What’s going to happen to all these companies? What’s AI going to do with all these companies?’ For us, it’s just increasing the usage.”

Growth and Funding

• Databricks closed a $5 billion raise at a $134 billion valuation【https://techcrunch.com/2025/12/16/databricks-raises-4b-at-134b-valuation-as-its-ai-business-heats-up/】.
• It also secured a $2 billion loan facility.

Despite being priced by private markets as an AI company, Databricks still identifies strongly with its roots as a cloud data‑warehouse provider.

Genie: An LLM‑Powered Interface

Ghodsi highlighted Genie, the company’s LLM‑based user interface, as a key driver of usage growth. Genie lets users ask natural‑language questions—e.g., “Why did warehouse usage and revenue spike on particular days?”—that previously required custom query languages or specially programmed reports.

“Any product with an LLM interface can be used by anyone,” Ghodsi noted.

Genie exemplifies how SaaS products can replace traditional GUIs with conversational interfaces【https://x.com/buccocapital/status/2019598551228223526】.

Threats to Traditional SaaS

An AI VC jokingly tweeted that enterprises might rip out their SaaS “systems of record” for home‑grown solutions【https://x.com/venturetwins/status/2019494196953154011】. Ghodsi counters this:

• Systems of record store critical business data (sales, support, finance) and are hard to replace.
• Model makers are not offering databases to become new systems of record; they aim to replace user interfaces with natural language, APIs, or plug‑ins for agents.

Consequently, the traditional moat—specialized expertise in products like Salesforce, ServiceNow, or SAP—weakens when the interface becomes invisible, “like plumbing.”

“Millions of people around the world got trained on those user interfaces. That was the biggest moat those businesses have,” Ghodsi warned.

Lakebase: A Database for Agents

To capitalize on the AI‑first trend, Databricks launched Lakebase, a database designed for AI agents. Early traction is strong:

“In its eight months on the market, it’s done twice as much revenue as our data warehouse did at the same age. It’s like comparing toddlers, but this toddler is twice as big.”

Future Plans

With the recent funding round closed, Databricks is not planning another raise or an IPO in the near term. Ghodsi explained:

“Now is not a great time to go public. I just wanted to be really well capitalized should the markets go ‘south’ again, as they did in the 2022 post‑ZIRP crash. A thick bank account protects us and gives us many, many years of runway.”