Snowflake’s New CEO Aims to Propel Growth Through AI Acquisitions

Snowflake Inc, under the leadership of CEO Sridhar Ramaswamy, is setting its sights on acquisitions in the artificial intelligence sector as a strategic move to outpace competitors such as Databricks Inc. and the behemoths of cloud computing.

Aggressive Strategy to Maintain The Lead

Though an attempted acquisition of Reka AI for a sum exceeding $1 billion fell through, Snowflake is not slowing down. This past April, they showcased their proprietary large language model named Arctic, in addition to extending support to other prominent language models like those developed by OpenAI.

Recruiting Top AI Talent

The company is working on assimilating a team of about 35 from the AI startup TruEra, which had amassed $25 million in funding in 2022. Ramaswamy, who joined from Google and is also a co-founder of Neeva, highlighted the company’s intent to ‘opportunistically’ seek acquisitions to attract premier AI expertise, pointing out the rarity of individuals with the capability to train top-tier foundation models.

Fostering Revenue Growth Amid Budget Constraints

Since taking the CEO mantle, a key goal for Ramaswamy has been to rekindle the company's revenue growth, which has seen a dampening due to tight corporate technology spending. Investing in AI technology forms a substantial part of this growth strategy.

Competing in the Data and AI Landscape

Snowflake's competition with Databricks extends into multiple arenas, necessitating enhancements in functionalities such as the smooth utilization of data across various storage platforms. As Databricks moves to expand by acquiring Tabular — a data management company, and reporting a 200% rise in sales for its data warehousing product, Snowflake's competitive response is to simplify the process of storing data and extracting insights from it.

The Investor Perspective

With Snowflake's sales growth rate expected to slow down, investors are questioning the company's strategies to maintain AI relevance and to compete with other AI and cloud giants like Microsoft Corp. and Amazon.com Inc.’s AWS. Over the past year, Snowflake shares have suffered a 26% decline. However, those interested in investing in Snowflake can explore opportunities through ETFs like the TrueShares Technology, AI & Deep Learning ETF and the Global X Cloud Computing ETF.

Snowflake, AI, Acquisitions