Snowflake Acquires Observe for $1 Billion to Embed AI-Powered Observability Into Data Cloud

Snowflake to acquire Observe to boost observability in AIops

Snowflake is planning to acquire AI-based site reliability engineer (SRE) platform provider Observe to strengthen observability capabilities across its offerings and help enterprises with AIOps as they accelerate AI pilots into production. "Longer term, Snowflake is positioning itself as infrastructure for AI at scale. As AI agents generate exponentially more data, vertically integrated data and observability platforms become essential to running production AI reliably and economically," Carl Perry, head of analytics at Snowflake, told InfoWorld. Explaining further, Perry said that issues and bugs with AI-driven applications are harder to diagnose than in traditional software, increasing the pressure on enterprises to identify and resolve problems quickly, and Snowflake wants to tackle this by Observe's telemetry, log, and trace analytics with Snowflake's AI and Data Cloud.

Snowflake acquires Observe to enhance its observability capabilities - SiliconANGLE

Snowflake acquires Observe to enhance its observability capabilities Snowflake Inc. today announced that it's buying Observe AI Inc., a well-funded startup with an eponymous observability platform. The terms of the deal were not disclosed. When rumors of the acquisition first emerged last month, The Information cited sources as saying that it values Observe at about $1 billion. That's about two and half times the amount of funding the nine-year-old company raised from investors. Observe's platform helps developers find the root cause of application slowdowns, website outages and other technical issues. It can also collect data on the more routine aspects of a company's technology operations. For example, a software team could use Observe to track the inference costs incurred by a large language model. Snowflake plans to integrate the company's observability software into its namesake cloud data platform. The effort is set to particular emphasis on an Observe component called AI SRE. As the name suggests, AI SRE is an artificial intelligence chatbot that helps developers diagnose technical issues. Users can not only ask the AI to uncover the cause of a malfunction but also customize how it goes about the task. For example, AI SRE could be instructed to focus solely on error logs from the past 24 hours when analyzing a newly detected outage. AI SRE is powered by a data management engine called the O11y Context Graph. According to Observe, the engine ingests hundreds of terabytes of telemetry per day from customer environments. It links together related pieces of data and creates indexes, collections of shortcuts that speed up information searches. The O11y Context Graph also generates materialized views, cached copies of query results that cut loading times. Observe's platform keeps the data it processes in Snowflake. According to the companies, the acquisition will ease troubleshooting tasks for customers by enabling them to implement longer retention windows. A retention window is the amount of time that passes before an enterprise deletes its archived telemetry. Historically, organizations had to delete telemetry fairly often to avoid excessive storage costs. That practice can complicate troubleshooting efforts. If a technical issue first emerged 2 months ago but the affected company only keeps error logs for 1 month, engineers may struggle to find the root cause. Snowflake compresses data and keeps it in low-cost object storage services to lower customers' infrastructure bills. According to the company, its platform's object storage features will enable customers to retain telemetry for longer than would otherwise be practical. That means more information will be available for incident investigations. "An organization's ability to remain resilient is strictly limited by how much data it can afford to ingest, how it navigates the myriad of formats and silos, and the speed at which it can reason across it," Christian Kleinerman, Snowflake's executive vice president of product, wrote in a blog post today. "Snowflake and Observe will empower customers to manage enterprise-wide observability across petabytes of telemetry with a modern, scalable architecture, enabling them to run production applications and agents with greater confidence, without sacrificing data to control costs."

Snowflake to acquire Observe, offer its AI observability tools to enterprises

In a statement, Snowflake said the Observe platform will be integrated directly into its AI data cloud so that enterprises can easily ingest and retain all of their telemetry data, including logs, metrics, and traces, while lowering observability costs by up to 60%. Snowflake is set to acquire Observe, an AI-powered platform, to deliver observability capabilities for enterprises building AI-driven applications. The deal aims to bolster Snowflake's position in the IT operations management software market by tying observability closer to its AI data cloud. The deal is pegged at $1 billion, according to The Information. In a statement, Snowflake said the Observe platform will be integrated directly into its AI data cloud so that enterprises can easily ingest and retain all of their telemetry data, including logs, metrics, and traces, while lowering observability costs by up to 60%. Observe's AI Site Reliability Engineer product uses a unified context graph to correlate different telemetry signals, helping teams detect anomalies earlier and resolve issues faster as systems become more distributed and autonomous. Snowflake CEO Sridhar Ramaswamy highlighted the importance of the Observe acquisition amid the rise of AI agents and complex data applications. "Reliability is no longer just an IT concern -- it directly shapes business outcomes. At its core, observability is a data problem: massive, continuous telemetry that represents the ground truth of how systems behave in the real world. As enterprises operationalise AI, that data foundation becomes indispensable," he told ET. The combined platform is designed to manage massive telemetry volumes using object storage and elastic compute, which Snowflake says is critical for operating next-generation AI agents and applications at scale. Snowflake expects this to support customers in building and operating more reliable AI agents and applications. "By combining Observe with Snowflake, we help customers move from reactive monitoring to proactive, automated, AI-powered troubleshooting -- identifying root causes faster and resolving production issues up to 10 times faster," Ramaswamy said. This will also strengthen Snowflake's addressable opportunity in the IT operations management software market, which is estimated at $51.7 billion, per Gartner.

Snowflake CEO Confirms Observe Acquisition To Boost 'Enterprise-Wide Observability'

"By bringing Observe's capabilities directly into the Snowflake AI Data Cloud, we are empowering our customers to manage enterprise-wide observability across terabytes to petabytes of telemetry with a modern, scalable architecture and AI-powered troubleshooting workflows," said Snowflake CEO Sridhar Ramaswamy. Snowflake officially confirmed today its intent to buy AI-powered observability startup Observe with CEO Sridhar Ramaswamy touting the blockbuster deal. "By bringing Observe's capabilities directly into the Snowflake AI Data Cloud, we are empowering our customers to manage enterprise-wide observability across terabytes to petabytes of telemetry with a modern, scalable architecture and AI-powered troubleshooting workflows," said Snowflake CEO Ramaswamy in a statement today. Financial details of Snowflake's acquisition of Observe were not disclosed. Ramaswamy said its acquisition of San Mateo, Calif.-based Observe positions Snowflake to usher in the next generation observability architecture and expand its presence in a rapidly growing IT operations management software market. "As our customers build increasingly complex AI agents and data applications, reliability is no longer just an IT metric -- it's a business imperative," said Ramaswamy. [Related: 10 AI Startup Companies To Watch In 2026] Data and AI cloud provider Snowflake last month struck a multi-year $200 million partnership with AI research and development company Anthropic through which Anthropic's Claude AI models will be available in the Snowflake platform. Observe CEO Jeremy Burton said merging with Snowflake gives his company "the opportunity to accelerate our mission." "With Snowflake helping us scale, we'll be able to bring observability to more enterprises worldwide and help them run reliable, high-performing AI applications and agents," he said in a statement. The deal is expected to close later this year. After the deal closes, Snowflake said it will deepen its commitment to helping customers build and operate reliable agents and applications. Observe offers customers choice through an open-standard architecture based on Apache Iceberg for storage and OpenTelemetry for ingestion. The company aims to significantly lower costs by leveraging economical S3 storage, compression and elastic compute resources. Observe will make observability core to the AI Data Cloud, advancing the shift from reactive monitoring to proactive, centralized observability. In August, Observe closed a $156 million Series C funding round. The round was led by Sutter Hill Ventures with participation from Madrona Ventures, Alumni Ventures, Snowflake Ventures and Capital One Ventures. "As enterprises embrace AI, the developer productivity bottleneck has moved from generating code to understanding issues from their applications and agents. We solve this problem at scale," said Burton. "That's why Observe has grown so quickly. Our AI SRE helps engineers troubleshoot faster and provide greater visibility at a fraction of the cost." Observe said its developer-friendly approach complements Snowflake's existing workload engines by providing teams with real-time enterprise context, faster root-cause analysis, and AI-assisted troubleshooting.

Snowflake Strengthens AI Moat With Observe Deal - Snowflake (NYSE:SNOW)

Snowflake Inc. (NYSE:SNOW) announced plans to acquire Observe on Thursday, aiming to embed AI-powered observability into its AI Data Cloud and expand its footprint in IT operations management. The deal follows earlier reports that Snowflake had been in advanced talks to buy Observe for about $1 billion, highlighting the growing strategic importance of observability to its AI ambitions. Snowflake said it will integrate Observe's platform into its core stack, enabling enterprises to ingest, store, and analyze full-fidelity telemetry data at lower cost. Although financial terms were not disclosed, prior reports suggested the transaction could approach $1 billion, potentially making it one of Snowflake's largest acquisitions. The move targets a fast-growing IT operations management market and supports a shift from alert-based monitoring to automated troubleshooting by combining Observe's AI Site Reliability Engineer with Snowflake's data infrastructure. The unified platform will rely on open standards such as Apache Iceberg and OpenTelemetry, allowing Snowflake to handle massive telemetry volumes from modern AI agents and production-scale applications while improving operational visibility. Snowflake CEO Sridhar Ramaswamy said, "As our customers build increasingly complex AI agents and data applications, reliability is no longer just an IT metric - it's a business imperative." Observe CEO Jeremy Burton said the combination delivers "faster insights, greater reliability, and dramatically better economics." Snowflake held cash and cash equivalents of $1.94 billion as of Oct. 31, 2025. In a separate announcement, Snowflake detailed how it is bringing new capabilities to Cortex AI by integrating Google's Gemini models for business use cases; details are in enterprise ready AI coverage. SNOW Price Action: Snowflake shares were down 2.36% at $227.99 at the time of publication on Thursday, according to Benzinga Pro data. Photo by Grand Warszawski via Shutterstock SNOWSnowflake Inc$227.60-2.53%OverviewCLOUGlobal X Cloud Computing ETF$22.57-1.48%DDOGDatadog Inc$134.02-5.25%DTDynatrace Inc$42.76-2.46%IGViShares Expanded Tech-Software Sector ETF$104.69-1.46%Market News and Data brought to you by Benzinga APIs