Databricks CEO Ali Ghodsi sees the potential for multiple acquisitions and an initial public offering for his firm next year, especially as three big industries increasingly embrace artificial intelligence.
Databricks makes an analytics platform that simplifies the evaluation of big data. The company's cloud and machine learning platform unifies data science, engineering, and business, enabling data science teams to work faster and more securely.
Databricks has raised nearly $900 million in venture capital (most recently at a $6.2 billion valuation), had held onto $500 million of that as of June, and achieved revenue run rate exceeding $350 million in Q3. (Revenue run rate extrapolates a quarter's revenue across 12 months to show what annual revenue would be based on the quarter.)
The seven-year-old San Francisco startup, which has 1,300 employees and 6,000 enterprise customers, is "IPO-ready" for 2021, says Ghodsi. "Things are looking promising for us" to go public in 2021, he says, adding that multiple acquisitions may be on the docket, too: "I get pinged almost on a daily basis. We are looking at lots of investments."
Ghodsi believes AI will have an unprecedented year in 2021. "AI's time has arrived," he says. US revenue for AI software is pegged at $35 billion for this year, according to Statista, and is expected to more than triple by 2025.
Ghodsi predicted that three industries will increasingly embrace in AI in 2021:
Oil and gas – 'thousands of use cases'
Databricks is working with Shell Oil on sprawling projects, Ghodsi says, in partnership with other AI heavyweights C3.ai (expected to go public Wednesday) and Snowflake. For example, one Shell project puts sensors on 200 million oil valves and is designed to predict when maintenance is needed. The sensors aim to predict breakdowns with 70% accuracy, resulting in what Ghodsi says equals "savings in the billions."
"There are thousands of use cases" for AI in oil and gas, he adds.
AI use in the oil industry has been a controversial issue, but Ghodsi says preventative maintenance can help guard against environmental disaster. Databricks has advocated for "sustainable transformation" that takes a long view of AI for the sake of the environment and other key impacts. "The long-term viability of a corporation depends not just on maximizing profits for shareholders, but making sure the interests of consumers, employees, and the environment are maximized as well," wrote Junta Nakai, a global industry leader for financial services at Databricks in an October opinion piece.
Fintech – piecing together bits of data to show company performance
Ghodsi says financial technology is "leveraging data and video data cases everywhere" to piece together indications of how companies are performing, giving investors key indicators they have never had before.
"Investors are using that to evaluate company performance," he said, like using data derived from videos showing the foot traffic to stores, language-processing programs analyzing customer reviews, and constant crunching of data from credit reports.
"Companies are using it for risk-modeling" as well, he added: "'Should I give you this loan or not?' Sometimes companies see positive signs they might have missed, and can issue credit cards to people who couldn't otherwise get them."
Given the very real risks of bias in this kind of software, Databricks uses a program that notes potential issues.
Drug research – AI is helping COVID-19 vaccine efforts
All kinds of innovative startups are using AI to fight the COVID-19 pandemic, Ghodsi says, including big pharma analyzing human genome sequences to guide vaccine research.
"AI's impact on drug discovery is going to be big news in the next year," he says. Drug trials on around 100,000 people will produce huge amounts of data, as hundreds of experiments are analyzed with AI algorithms on the Databricks platform and elsewhere. "Drug research is our most accelerated area," he says, "and we would not have predicted that a year ago."