Databricks Deepens Azure Bet With Extended Microsoft Deal

Databricks and Microsoft have expanded their partnership into the 2030s, to closely integrate both their products and services.

Databricks is deepening its bet on Azure, growing its use of Azure Databricks to run its own core business operations and analytics.

At the same time, both companies are advancing native integration across the Microsoft stack. This includes Databricks Genie and Microsoft 365, tools that many enterprise IT teams already use for reporting and collaboration.

Judson Althoff, CEO of Microsoft Commercial Business, frames the move in terms of organisational knowledge. 

“The next generation of AI will be defined by how effectively organisations turn their unique knowledge into intelligence,” he says.

“Microsoft and Databricks are helping customers connect data, AI and business context to accelerate decision-making and drive measurable impact.”

Judson also points to the operational signal sent by Databricks running its own workloads on the platform: “Databricks’s decision to run its own core business operations on Azure Databricks also gives customers confidence in a platform proven at enterprise scale.”

Deepening the Azure investment

Databricks will increase its use of Microsoft Azure Cobalt to improve performance and efficiency. This is the area likely to interest infrastructure and platform teams most directly.

Databricks currently uses Cobalt 100 and plans to adopt Cobalt 200. According to Microsoft, Cobalt 200 could deliver up to 50% better performance compared with the prior generation.

Cobalt 200 also includes memory encryption enabled by default, a detail relevant to security and compliance teams evaluating cloud infrastructure choices. Neither company frames this as optional given the scale of workloads involved.

“For nearly a decade, Databricks and Microsoft have helped enterprises innovate with data and AI,” says 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.”

Genie One's expanded reach

Building on the relationship, Microsoft will continue integrating the Databricks data and AI platform across its products. This includes bringing Genie, described by Databricks as an AI co-worker, directly into customer workflows.

At its Data + AI Summit in San Francisco, US, Databricks announced Genie One, which it describes as the next evolution of Genie. The distinction from the first generation is significant for anyone assessing data tooling across a mixed application estate.

The first generation of Genie provided conversational analytics limited to data stored in Databricks. Genie One now connects business users to data held both in Databricks and across a wider range of connected applications, according to Databricks.

Rich Radley, Vice President of Field Engineering for EMEA at Databricks, explained the change to AI Magazine: “For me, democratising data isn’t just about making information easier to access, it’s about giving more people the ability to turn ideas into action.

“Too often, the people who understand the business best still have to rely on technical teams to answer questions, build reports or test new ideas. That slows innovation down.”

He argues Genie One addresses that gap directly. 

“Genie One helps shift that balance by putting AI into the hands of more employees, enabling them to explore information, automate routine work and make better-informed decisions without needing deep technical expertise,” he says.