Snowflake to Acquire Observe in $1 Billion Move to Anchor AI Reliability

In a significant move to consolidate its position as the central hub for enterprise intelligence, Snowflake, the AI Data Cloud company, announced today that it has signed a definitive agreement to acquire Observe, a frontrunner in AI-powered observability.

This acquisition represents a strategic pivot for Snowflake, moving beyond traditional data warehousing and into the critical field of IT operations and system reliability. By integrating Observe’s specialized technology, Snowflake aims to deliver a next-generation observability platform designed specifically for the scale and complexity of modern, AI-driven enterprises.

The union addresses a growing "data tax" in the industry, where the sheer volume of logs, metrics, and traces generated by AI agents often becomes too expensive and difficult to manage using legacy monitoring tools. Because Observe was originally built on top of Snowflake’s architecture, the integration is expected to be seamless, allowing customers to treat operational telemetry as first-class data within the AI Data Cloud. This approach leverages open standards like Apache Iceberg and OpenTelemetry, ensuring that enterprises can maintain visibility into their systems without being tethered to proprietary formats or skyrocketing storage costs.

From a leadership perspective, Snowflake CEO Sridhar Ramaswamy emphasized that as businesses deploy increasingly complex AI applications, the ability to monitor and troubleshoot those systems in real-time is no longer optional. By acquiring Observe, Snowflake provides a unified environment where data storage and operational health intersect. This deal is poised to disrupt the broader observability market, positioning Snowflake as a direct competitor to established players by offering a more economical, AI-native alternative for managing the health of the modern enterprise stack.