Databricks and Microsoft have expanded their decade-long strategic partnership, extending it into the 2030s. Databricks will further adopt Azure Databricks to power its core business operations and build its unified lakehouse architecture, while leveraging Azure Cobalt, Microsoft’s next‑generation Arm-based infrastructure, to enhance performance and efficiency. Microsoft will continue weaving the Databricks Data and AI platform into its product portfolio, bringing capabilities like Genie, Databricks’ AI co-worker, directly into customer workflows. Together, the companies aim to help enterprises build AI that is firmly rooted in their own business context, with the cost efficiency, control, and choice required to scale successfully.
Enterprises want AI that understands their customers, products, operations, metrics, and business processes, all while running securely where work happens. Yet, most still struggle to connect AI to trusted business knowledge, govern models and agents consistently, and control costs. Microsoft and Databricks are helping customers close that gap:
“For nearly a decade, Databricks and Microsoft have helped enterprises innovate with data and AI,” said Ali Ghodsi, Co‑founder and CEO of Databricks. “Today, our partnership is stronger than ever. 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. This lets customers get the full benefits of agents and models while controlling costs and ensuring governance.”
“The next generation of AI will be defined by how effectively organizations turn their unique knowledge into intelligence,” said Judson Althoff, CEO, Microsoft Commercial Business. “Microsoft and Databricks are helping customers connect data, AI, and business context to accelerate decision-making and drive measurable impact. 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. Databricks’ decision to run its own core business operations on Azure Databricks also gives customers confidence in a platform proven at enterprise scale.”
Databricks Runs Core Business Operations on Azure Databricks
As part of this latest deal, Databricks deepens its commitment to Azure, running its own core business operations and analytics on Azure Databricks, using the very platform it delivers to customers at scale.
Advancing Performance with Azure Cobalt
Databricks will also expand its use of Azure Cobalt, Microsoft’s next-generation Arm-based infrastructure, to improve performance and efficiency for agentic and data-intensive workloads. Databricks currently uses Cobalt 100 and plans to adopt Cobalt 200, which delivers up to 50% better performance and includes memory encryption enabled by default.
Deep Integrations for Databricks Genie and Unity AI Gateway with Microsoft Product Stack
By combining the Databricks Data + AI Platform with Azure’s global scale, customers can accelerate AI transformation while maintaining control and reliability. As a native Azure service, Azure Databricks makes its AI capabilities available directly within customers’ existing Microsoft environment, grounding and operating agents on enterprise data with Genie and Genie Ontology, and governing models, agents, and cost through Unity AI Gateway. Deeply integrated across the Microsoft ecosystem spanning Microsoft Entra, Azure Data Lake Storage, Azure security, Microsoft OneLake, Power BI, Microsoft Purview, Microsoft Foundry, Power Platform, Microsoft 365, Teams and Copilot, these capabilities bring governed, real-time data and AI into business workflows, giving organizations the context, control, choice, and cost efficiency needed to drive impact.
