Databricks Microsoft Azure partnership extended into the 2030s

Databricks and Microsoft expanded the Databricks Microsoft Azure partnership into the 2030s, a longer-term commitment aimed at enterprise customers trying to connect AI systems to proprietary business data. The companies did not disclose financial terms, revenue targets or any new customer commitments tied to the agreement.

Under the expanded deal, Databricks said it will use more Microsoft Azure infrastructure to run its own business. That includes operating core business systems and analytics on Azure Databricks and building its unified data lakehouse on the platform.

Databricks also plans to increase its use of Azure Cobalt, Microsoft’s Arm-based compute infrastructure, for data-heavy workloads and agentic AI. The company already uses Cobalt 100 processors and intends to move to Cobalt 200, which Microsoft says offers up to 50% better performance and includes memory encryption by default.

What does the Databricks Microsoft Azure partnership include?

The agreement deepens a two-way commercial and technical relationship: Databricks is committing more of its own operations to Azure, while Microsoft is continuing to embed Databricks data and AI technology across its product portfolio. For enterprise buyers, the pitch is a tighter path from governed corporate data to AI assistants, analytics tools and developer workflows.

Microsoft said it will keep integrating Databricks technology into Microsoft 365, Teams, Copilot, Power BI, OneLake, Purview and Microsoft Foundry. The list matters because Microsoft is trying to make Copilot and related AI services more useful inside companies that have complex data estates and strict governance requirements.

The integrations include Databricks Genie, an AI assistant designed to connect users and software agents with business data. Databricks Genie Ontology supplies business concepts and relationships for interpreting that data, while Unity AI Gateway gives companies a central layer for controlling models, agents, usage and costs, according to the companies.

The companies framed the expansion around a familiar bottleneck in enterprise AI adoption. Many large organizations have the operational data needed to make AI tools more specific to their business, but still struggle to connect that data to models and agents without weakening controls over security, governance and spending.

Judson Althoff, chief executive of Microsoft’s commercial business, said the next phase of AI will depend on how well organizations convert their own knowledge into intelligence. He also said Databricks’ greater use of Azure Databricks and Cobalt infrastructure should help with performance, efficiency and scale.

Databricks and Microsoft said Azure Databricks is already used by thousands of organizations. Named customers include Banco Bradesco, Electrolux, Sumitomo Mitsui Banking Corp., Unilever and Major League Baseball’s Cincinnati Reds.

The announcement gives both companies a cleaner enterprise AI story, but leaves out several commercial details. Databricks did not disclose how much additional Azure capacity it expects to consume, and Microsoft did not quantify the expected impact of the broader integrations across its software products.

This story draws on original reporting from SiliconANGLE.