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Databricks enters cybersecurity market with Lakewatch launch, bulking up ahead of IPO

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Why This Matters

Databricks' entry into the cybersecurity market with Lakewatch marks a significant expansion of its data processing and AI capabilities, positioning the company as a potential disruptor in the security industry. This move not only diversifies its revenue streams ahead of a possible IPO but also introduces innovative AI-driven security solutions that could challenge established SIEM providers.

Key Takeaways

Databricks has grown from startup into major software company, generating billions by processing data and running generative artificial intelligence models for clients.

For its next leg of growth, it's turning to cybersecurity with a new offering called Lakewatch.

Adobe and National Australia Bank are currently using it, according to a statement. Anthropic also uses Databricks for cybersecurity purposes, and its models are running inside Lakewatch. Customers can now ask about adopting Lakewatch.

CEO and cofounder Ali Ghodsi said large language models, or LLMs, "have matured to a point that you can actually automate and augment a significant portion" of cybersecurity.

The product represents a nascent alternative to security information and event management, or SIEM, services from the likes of Palo Alto Networks , Cisco -owned Splunk, Google and Microsoft .

If Lakewatch takes hold, it could help Databricks justify its $134 billion valuation to public investors ahead of a public offering. Ghodsi said in December that he wouldn't rule out a 2026 IPO.

Rather than charge based on the amount of data stored, Databricks will determine Lakewatch costs by how much work the software performs.

"The prevailing pricing model is at odds with protecting against this avalanche that's coming our way, because it's just too prohibitively expensive to get all your data in there," Ghodsi said in an interview.