Databricks and Microsoft have announced a broader strategic partnership aimed at helping enterprises deploy artificial intelligence (AI) with stronger business context, governance, and operational efficiency. The expanded agreement extends a collaboration that began nearly a decade ago and is expected to continue into the 2030s.
As part of the partnership, Databricks will increase its investment in Microsoft Azure by running its own core business operations and analytics on Azure Databricks. The company will also expand its use of Azure Cobalt, Microsoft’s Arm-based infrastructure, to improve performance for AI and data-intensive workloads.
Microsoft, meanwhile, plans to continue integrating the Databricks Data and AI Platform into its products, bringing capabilities such as Databricks Genie directly into enterprise workflows.
Focus on enterprise AI with business context
According to the companies, many organizations continue to face challenges in connecting AI models with trusted enterprise data while maintaining governance and controlling infrastructure costs.
The expanded partnership aims to address those issues by combining Azure’s cloud infrastructure with Databricks’ data and AI platform. The companies said the integration is intended to help organizations build AI systems that understand business data, operational processes, products, customers, and internal metrics.
Databricks adopts Azure for internal operations
One of the notable announcements is Databricks’ decision to use Azure Databricks for its own business operations and analytics. By running internal workloads on the same platform offered to customers, the company said it is reinforcing its commitment to Azure and demonstrating enterprise-scale deployment.
Microsoft said this move gives customers greater confidence in a platform that is also used by Databricks for mission-critical operations.
Azure Cobalt to power demanding AI workloads.
Databricks also plans to increase its use of Azure Cobalt processors.
The company currently uses Azure Cobalt 100 and intends to adopt Azure Cobalt 200, which Microsoft says offers up to 50% better performance while enabling memory encryption by default. The infrastructure is designed to support agent-based AI applications and data-intensive enterprise workloads.
Broader Microsoft ecosystem integration
The collaboration also expands native integration between Databricks and Microsoft’s software ecosystem.
Capabilities such as Databricks Genie, Genie Ontology, and Unity AI Gateway will integrate across Microsoft Entra, Azure Data Lake Storage, Azure security services, Microsoft OneLake, Power BI, Microsoft Purview, Microsoft Foundry, Power Platform, Microsoft 365, Teams, and Copilot.
The companies said these integrations are intended to provide enterprises with governed access to real-time business data while simplifying AI deployment across existing Microsoft environments.