TLDR: Naveen Rao, the Indian-origin AI chief at Databricks, is stepping down from his role to establish a new venture. This new company will focus on developing next-generation computers aimed at significantly reducing the escalating costs associated with artificial intelligence computing. Databricks will retain Rao in an advisory capacity and is reportedly investing in his new startup.
Naveen Rao, a prominent Indian-origin leader in the artificial intelligence sector and the current AI chief at the $100 billion valuation startup Databricks, is embarking on a new entrepreneurial journey. Rao is departing from his executive role to found a new company dedicated to building next-generation computer systems, specifically designed to address the soaring costs of AI computing power. This move comes at a time when Databricks has recently secured a substantial $10 billion Series J funding round, pushing its valuation to an impressive $62 billion, with revenues rapidly approaching a $3 billion annual run rate.
Rao’s departure is not a complete severance of ties with Databricks. He will transition into an advisory role at his former company, and Databricks has confirmed its intention to invest in his new venture, though the specific investment amount remains undisclosed. This backing from Databricks signals their belief in the potential of Rao’s new endeavor and their commitment to fostering innovation, even from their alumni.
Naveen Rao is a serial entrepreneur with a proven track record in the AI space. He is best known as the founder of MosaicML, an AI infrastructure company that Databricks acquired for $1.3 billion in 2023. MosaicML was instrumental in enabling organizations to develop state-of-the-art large AI models more efficiently. Prior to MosaicML, Rao co-founded Nervana Systems, a machine intelligence platform, which was acquired by Intel Corporation in 2016 for approximately $350 million. Following the acquisition, Rao led Intel’s AI program, growing it into its own division. His extensive background in scaling solutions that enhance AI efficiency and affordability positions his new venture with significant credibility.
The new startup aims to tackle one of the most critical challenges in the rapidly expanding AI landscape: the prohibitive cost of computing power. As AI models grow in complexity and demand, the need for more efficient and cost-effective hardware solutions becomes paramount. Rao has reportedly held early discussions with other investors to secure additional backing for his company, which is expected to attract considerable interest given his past successes and the pressing need for innovation in AI hardware.
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Databricks, meanwhile, continues its strong growth trajectory, with forecasts suggesting it could become free cash flow positive by late 2024. The company’s Data Intelligence Platform, now enhanced with generative AI accelerators, is helping enterprises deploy AI agent systems more seamlessly, underscoring the continued importance of AI in its core business strategy.
