Snowflake Eyes Reka AI Buy For $1B To Boost Generative AI, LLMs
Snowflake is seeking to acquire AI startup company Reka AI for over $1 billion as the cloud data superstar strives to build the world’s No. 1 AI ecosystem.
The $2.67 billion company is reportedly in talks to acquire Reka AI in a move to boost its generative AI innovation and capabilities.
“We have this strategy around how do we assemble the world’s No. 1 ecosystem for AI, apps and expertise?” Snowflake’s Tyler Prince, worldwide leader of alliances and channels, told CRN earlier this month.
“The AI part is we have pretty cool things going on with Nvidia, we also announced partnerships recently with Reka AI, Mistral AI, Landing AI—so it’s really an exciting time to be at the intersection of a platform like Snowflake, and the opportunity to work with some innovative companies out there as well,” Prince (pictured) said. “That’s the AI part of building the No. 1 ecosystem.”
[Related: Snowflake Is Building World’s ‘No. 1 AI, Apps And Expertise’ Ecosystem, Says Global Partner Leader]
Bozeman, Mont.-based Snowflake currently has a market cap of $55 billion.
Snowflake declined to comment on the matter. Bloomberg was first to report the news.
Snowflake’s Investment In Reka AI
Founded in 2022 by former Google and Meta researchers, Reka AI provides large language models (LLMs), which are used for tasks such as customer support AI chatbots, content and code generation and much more.
Reka AI has raised millions of dollars over the past few years from large tech companies, including Snowflake.
In June Snowflake invested an undisclosed amount in Reka and established a partnership to allow users to run third-party models, like Reka, within their Snowflake account.
“The bigger opportunity is how we take some of these smaller, more customized models and be able to bring them to run inside Snowflake so that we can give customers the guarantee that if you’re using this model, the privacy of your data is guaranteed,” said Christian Kleinerman, senior vice president of products for Snowflake, at the time of the investment.
Snowflake, for its part, recently launched its own large language model dubbed Arctic in April. Arctic is designed to be the most open, enterprise-grade LLM on the market.
Technology companies are rushing to partner with or acquire generative AI startups as the AI era heats up in 2024.
For example, one of Snowflake’s largest rivals, Databricks, acquired AI startup MosaicML for $1.3 billion last year.
Snowflake’s New CEO Is An AI Expert
Snowflake appointed former longtime Google executive and AI expert, Sridhar Ramaswamy, as its new CEO in 2024.
During his 15 years at Google, he was an integral part of the growth of AdWords and Google’s advertising business from $1.5 billion to over $100 billion.
In early 2019, Ramaswamy co-founded AI-powered search engine company Neeva, which provided an advertising-free and tracking-free search engine. Neeva raised a total of over $75 million in funding over the years.
In May 2023, Snowflake acquired Neeva.
Ramaswamy led Snowflake’s AI business before being named CEO in February.
Snowflake Invests In Metaplane
This week, Snowflake also said it had invested an undisclosed amount of money in AI startup Metaplane. The Boston-based startup helps enterprises identify and rectify data quality issues with its AI platform.
Metaplane will also launch a native application for the Snowflake data platform.
Snowflake will release its fiscal 2025 first quarter financial results on May 22.
Wall Street and analysts expect Snowflake to report $787 million in revenue, which would be a 26 percent increase year over year.
