Databricks targets $175 billion valuation as AI's private-market frenzy rolls on

Databricks is set to raise fresh capital at a valuation between $165 billion and $175 billion, despite being valued at $134 billion just four months ago. 

Alongside this, OpenAI, Anthropic, and SpaceX are all aiming for valuations near or above $1 trillion, adding to a trend of AI firms setting astronomical valuation targets and hitting them on demand from investors. 

Is Databricks’ valuation backed up by its business?

The data and AI company Databricks is talking to investors about a new funding round that could start as soon as next month. The company has set a valuation of $165 billion to $175 billion, and if the deal closes at the higher end of the range, the company would be worth 30% more than it was in February 2026.

Back then, Databricks shared that its yearly revenue run rate had passed $5.4 billion, representing a 65% jump from the year before. Its AI products alone made up $1.4 billion of that total. 

The company had hit a $100 billion valuation in August 2025, and that figure rose to $130 billion by the end of that year. The February 2026 round, which combined $3 billion in equity and $2 billion in debt, landed at $134 billion with JPMorgan leading and Goldman Sachs, Morgan Stanley, and the Qatar Investment Authority among the equity participants.

Databricks’ main competitor is Snowflake, a public company that reported $1.39 billion in revenue last quarter, a 33% increase from last year. 

CEO Ali Ghodsi has told investors that Databricks is still planning to go public, possibly as early as 2027. He reportedly called 2026 the “worst year” to go public because so many other big tech companies, like SpaceX, are also planning their IPOs. 

OpenAI and Anthropic have both filed IPO paperwork, but have yet to launch. Instead, these companies have focused on raising funding rounds and pushing their valuation higher. Cryptopolitan recently reported that OpenAI reached an implied $1 trillion pre-IPO valuation, while Anthropic closed a round at a $965 billion valuation.

Are we in an AI bubble?

Questions are growing about whether some AI revenue is real or just part of a closed loop of cash. Reports show that more than half of the nearly $2 trillion in future cloud revenue on the books of Microsoft, Oracle, Alphabet (Google), and Amazon is tied to just two companies: OpenAI and Anthropic. 

A circular flow has been observed in which a tech giant gives billions to an AI startup, often in the form of cloud credits, and then the startup uses those same credits to rent computing power from the same tech giant. The tech giant then records that spending as revenue from a paying customer. 

For example, OpenAI’s cloud bill is over $60 billion a year, but its revenue is only about $25 billion. Anthropic spent about $2.66 billion on Amazon Web Services (AWS) in nine months, which is about the same as its revenue over that period. This system has led some analysts to call the reported earnings of big tech companies a “mirage.”

Cryptopolitan previously reported that OpenAI, Anthropic, xAI, and Waymo accounted for 63% of all venture capital raised in the first quarter of 2026. 

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