Cloud data powerhouse Snowflake has announced its intent to acquire Observe, an observability platform built on Snowflake's own databases since its inception. This strategic move aims to bolster Snowflake's data stack, making its platform better equipped to handle the immense volume of data generated by AI agents and to deliver AI-powered observability at an enterprise scale.
The company confirmed on January 8 that it had signed a definitive agreement to acquire Observe, pending regulatory approval. By integrating Observe's product, Snowflake plans to offer customers a unified solution for collecting and storing their telemetry data—including logs, metrics, and traces from software systems. This integration is expected to significantly improve the ability to detect and resolve potential bugs and issues within their data and software systems.
Observe's Journey and Strategic Alignment
Founded in 2017 by Jacob Leverich, Jonathan Trevor, and Ang Li, Observe launched its initial observability product, centralized on a Snowflake database, in 2018. The company was incubated at Sutter Hill Ventures and has since raised nearly $500 million in venture capital from prominent firms, including Snowflake Ventures, Sutter Hill Ventures, and Madrona.
A notable aspect of this acquisition is the deep historical connection between the two companies. Both Snowflake and Observe were incubated at Sutter Hill Ventures. Furthermore, Sutter Hill managing director Mike Speiser served as Snowflake's founding CEO from 2012 to 2014, and Jeremy Burton, Observe's current CEO, has been a member of Snowflake's board of directors since 2015.
Enhancing Data Monitoring in the Age of AI
The integration of Observe into Snowflake's ecosystem promises substantial benefits for users. According to a Snowflake blog post, users will be able to proactively monitor their data stack and identify and resolve issues up to 10 times faster than before. This capability is increasingly critical as the sheer volume of data generated by AI agents makes traditional monitoring tasks harder to scale.
The acquisition also facilitates the creation of a unified framework for telemetry data, which will be automatically collected and built upon robust Apache Iceberg and OpenTelemetry architectures.
Financial Details and Industry Context
While the specific financial terms of the deal were not disclosed, reports indicate the acquisition is valued at around $1 billion. If confirmed, this would mark Snowflake's largest acquisition to date, surpassing its $800 million purchase of Streamlit in March 2022. Streamlit is an open-source framework that empowers developers and data scientists to rapidly build and share data applications without requiring extensive front-end development expertise. As of July 2025, PitchBook data valued Observe at $848 million.
This deal reflects a broader trend of consolidation within the data industry, which saw a wave of activity in 2025. Data companies are actively seeking to expand their product offerings to become more attractive "one-stop-shop" partners in the rapidly evolving age of AI. Snowflake has been particularly active in this space, completing and announcing several AI-related acquisitions in 2025, including Crunchy Data, Datavolo, and Select Star, a data governance and metadata management platform.
