Snowflake to Acquire Observe to Strengthen AI Data Cloud Observability

Snowflake announced a definitive agreement to acquire Observe on January 8, 2026, marking a notable push into the 51.7 billion dollar IT operations management market. This strategic acquisition integrates Observe’s AI-powered observability platform directly into the Snowflake AI Data Cloud. The move is designed to help enterprises handle the massive telemetry data volumes required for modern AI applications while utilizing automated troubleshooting workflows.

AI Powered Observability Integration

The integration features an "AI Site Reliability Engineer" that aims to transition IT teams from reactive monitoring to proactive resolution. By using a unified context graph to link logs, metrics, and traces, the system identifies root causes and resolves production issues up to ten times quicker. This capability is necessary as enterprises build increasingly complex agents that demand high-fidelity data for operational resilience.

Open Standards and Economic Efficiency

This deal establishes a unified architecture based on open standards like Apache Iceberg and OpenTelemetry. Organizations can now retain 100 percent of their telemetry data at a lower cost by using Snowflake’s scalable object storage instead of expensive proprietary silos. This approach treats observability data as a primary asset, allowing for consistent governance and analytics across both IT and business datasets. Snowflake CEO Sridhar Ramaswamy stated in the press release that reliability is now a business imperative rather than just an IT metric. Observe CEO Jeremy Burton noted that the bottleneck for modern companies has shifted from writing code to troubleshooting distributed systems. Because Observe was originally built on Snowflake infrastructure, the merger is described by leadership as a natural extension of their existing partnership.

Strategic Leadership and Market Impact

The acquisition follows years of collaboration and a strategic investment from Snowflake Ventures during Observe’s Series C funding round in 2025. Both companies share a common lineage through Sutter Hill Ventures, which incubated both firms. Industry analysts suggest the deal valuation is approximately 1 billion dollars, reflecting the high growth and 180 percent net revenue retention recently reported by the startup. Closing of the acquisition is subject to required regulatory approvals and other customary closing conditions. Upon completion, Snowflake intends to deepen its commitment to helping customers build and operate reliable agents and applications at enterprise scale. This expansion allows the company to provide real-time enterprise context and faster root-cause analysis across its global customer base.

Snowflake announced a definitive agreement to acquire Observe on January 8, 2026, marking a notable push into the 51.7 billion dollar IT operations management market. This strategic acquisition integrates Observe’s AI-powered observability platform directly into the Snowflake AI Data Cloud. The move is designed to help enterprises handle the massive telemetry data volumes required for modern AI applications while utilizing automated troubleshooting workflows.

AI Powered Observability Integration

The integration features an "AI Site Reliability Engineer" that aims to transition IT teams from reactive monitoring to proactive resolution. By using a unified context graph to link logs, metrics, and traces, the system identifies root causes and resolves production issues up to ten times quicker. This capability is necessary as enterprises build increasingly complex agents that demand high-fidelity data for operational resilience.

Open Standards and Economic Efficiency

This deal establishes a unified architecture based on open standards like Apache Iceberg and OpenTelemetry. Organizations can now retain 100 percent of their telemetry data at a lower cost by using Snowflake’s scalable object storage instead of expensive proprietary silos. This approach treats observability data as a primary asset, allowing for consistent governance and analytics across both IT and business datasets. Snowflake CEO Sridhar Ramaswamy stated in the press release that reliability is now a business imperative rather than just an IT metric. Observe CEO Jeremy Burton noted that the bottleneck for modern companies has shifted from writing code to troubleshooting distributed systems. Because Observe was originally built on Snowflake infrastructure, the merger is described by leadership as a natural extension of their existing partnership.

Strategic Leadership and Market Impact

The acquisition follows years of collaboration and a strategic investment from Snowflake Ventures during Observe’s Series C funding round in 2025. Both companies share a common lineage through Sutter Hill Ventures, which incubated both firms. Industry analysts suggest the deal valuation is approximately 1 billion dollars, reflecting the high growth and 180 percent net revenue retention recently reported by the startup. Closing of the acquisition is subject to required regulatory approvals and other customary closing conditions. Upon completion, Snowflake intends to deepen its commitment to helping customers build and operate reliable agents and applications at enterprise scale. This expansion allows the company to provide real-time enterprise context and faster root-cause analysis across its global customer base.