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Snowflake Inc (NYSE:SNOW) new Chief Executive Officer Sridhar Ramaswamy is strategically targeting artificial intelligence acquisitions to stay ahead of rivals such as Databricks Inc. and major cloud computing companies.
Snowflake recently engaged in discussions to purchase Reka AI for over $1 billion, but the deal did not materialize. In April, Snowflake introduced its own large language model, Arctic, and supports other LLMs like OpenAI on its platform.
Last month, Snowflake revealed plans to onboard approximately 35 employees from AI startup TruEra, which secured $25 million in funding in 2022, reported Bloomberg.
“We will be on the lookout for acquisitions opportunistically,” Ramaswamy stated, which the report quoted, emphasizing Snowflake’s focus on recruiting top AI talent. “The number of people, in my opinion, that can train truly world-class foundation models right now is vanishingly small — I would say like a couple hundred people.”
Ramaswamy, who transitioned from Google and co-founded Neeva, stepped into the CEO role earlier this year.
His primary objective is to revitalize revenue growth, which has been hampered by constrained corporate technology budgets. A significant part of this strategy includes investments in AI, per the report.
Also Read: Snowflake & NVIDIA Team Up For AI Revolution: Details
However, investors have grown wary as Snowflake’s sales growth decelerated from 69% in the year ending January 2023 to an anticipated 24% for the current fiscal year ending January 2025. Snowflake’s stock has plummeted 30% year-to-date.
Competing with Data and AI company Databricks in several sectors, Snowflake must enhance functionalities like seamless data utilization across different storage systems, Ramaswamy explained.
Yesterday, Databricks announced it has agreed to acquire Tabular, a data management company founded by Ryan Blue, Daniel Weeks, and Jason Reid.
Databricks reported a 200% surge in sales of its data warehousing product last year, achieving a $250 million annual revenue run rate by the end of 2023, the report noted.
“If you’re in the business of storing data and getting insights from it, we’re just a much easier and more pleasant way to do it as opposed to needing to stitch together multiple services in order to do the same thing,” Ramaswamy remarked on the rivalry with Databricks,
Investor scrutiny remains on Snowflake’s AI relevance and its competitive stance against Databricks and cloud giants like Microsoft Corp. (NASDAQ:MSFT) and Amazon.com Inc. (NASDAQ:AMZN) Amazon Web Services.
Snowflake stock has lost over 26% in the last 12 months. Investors can gain exposure to the stock via TrueShares Technology, AI & Deep Learning ETF (NYSE:LRNZ) and Global X Cloud Computing ETF (NASDAQ:CLOU).
Price Action: SNOW shares are trading lower by 2.55% at $133.50 at the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Read Next: Snowflake’s GenAI Initiatives Drive Investor Interest: Analyst Sees Strong Revenue Growth Ahead
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