The transaction, which is estimated to be worth approximately $1.3 billion, reflects Databricks' strategic intent to capitalize on a rapidly expanding market for enterprises seeking to develop their own ChatGPT-style tools. Databricks values MosaicML at an impressive 65 times its annual recurring revenue of $20 million.

Founded in 2021, MosaicML has gained recognition for its large MPT language models. Their MPT-7B model has received over 3.3 million downloads and they recently introduced the MPT-30B model, which will allow organizations to quickly construct and train custom models using their data, all in a cost-effective manner. MosaicML's focus on reducing the cost of using generative AI has reduced the cost from a multi-million dollar investment to hundreds of thousands of dollars per model. Customers using the MosaicML platform include AI2 (Allen Institute for AI), Generally Intelligent, Hippocratic AI, Replit and Scatter Labs.

Founded in 2013 as a startup, Databricks focuses on data and artificial intelligence and has raised a total of $3.6 billion in various funding rounds. It has a customer base of over 10,000 organizations worldwide, including big names like Comcast and Condé Nast. Databricks provides the Databricks Lakehouse platform, which serves as a comprehensive solution and facilitates the efficient preparation and management of enterprise data for AI applications. Additionally, it unifies data, analytics and AI programming tools within a single integrated system, increasing overall operational efficiency.

This week, among other things, Thomson Reuters bought Casetext, a decade-old company originally focused on creating a platform where lawyers could share their knowledge and provide users with free access to annotated legal texts, for $650 million. However, Casetext later underwent a transformation and began using artificial intelligence (AI) and machine learning (ML) technologies to develop automated workflows and tools tailored to legal teams. Its products include CoCounsel, which leverages AI capabilities to help with document review, deposition preparation and contract analysis.

Analyst firm PitchBook forecasts the global generative AI market to reach $42.6 billion by 2023. It further forecasts a robust compound annual growth rate of 32%, which would lead to a market valuation of US$98.1 billion by 2026. In particular, the firm highlights the significant increase in VC funding for generative AI startups, which has skyrocketed from US$4.8 billion for the full year 2022 to an impressive US$12.7 billion in the first five months of this year alone.