Microsoft and Databricks expand Azure AI data partnership

Databricks and Microsoft have announced a significant expansion of their strategic partnership, focusing on integrating data management and agentic artificial intelligence across Microsoft's Azure cloud ecosystem. The multi-year agreement, which builds on a collaboration that began in 2018, was detailed at the Data AI Summit in San Francisco on June 12, 2025, and involves deeper technical integration and shared product development.

The core objective is to help enterprises overcome hurdles in AI adoption by providing tools that ground AI systems in specific business knowledge. Executives from both companies stated that AI agents require finely tuned data that understands a company's unique products, customers, and operations to function effectively. The partnership aims to create a unified, governed platform where businesses can deploy these AI agents with confidence in data security and compliance.

A key technical component of the expanded deal is Databricks' planned adoption of Microsoft's Arm-based Azure Cobalt virtual machine infrastructure to improve performance and efficiency for data-intensive and AI workloads. The company currently uses the Cobalt 100 and plans to adopt...