Snowflake Bets Big on Observe With $1B Deal to Power AI Monitoring

Cloud data giant Snowflake just made its biggest strategic move yet - acquiring observability specialist Observe in a landmark $1 billion deal announced January 8, 2026. This isn't just another corporate purchase; it's Snowflake doubling down on solving one of the toughest problems in today's AI-driven enterprises.

More Than Just Business Partners

The two companies share DNA dating back to their beginnings. Both were nurtured by venture firm Sutter Hill Ventures, and Observe CEO Jeremy Burton has sat on Snowflake's board since 2015. "We've been working shoulder-to-shoulder with Snowflake since day one," Burton told reporters. "This formalizes what was already a deep technical partnership."

Solving the AI Monitoring Crisis

Here's why this matters: As businesses deploy more AI systems, they're drowning in telemetry data - logs, metrics and traces that traditional tools struggle to analyze efficiently. Snowflake claims integrating Observe will let customers spot and fix issues ten times faster by keeping everything under one roof.

"Imagine having all your system monitoring data right where your business data lives," explained Snowflake CTO Christian Kleinerman. "No more jumping between tools or dealing with stale data copies."

Built for Today's Data Challenges

The technology checks all the right boxes:

• Runs natively on Snowflake's platform
• Works with open standards like Apache Iceberg
• Compatible with OpenTelemetry instrumentation
• Avoids costly data movement between systems

This acquisition continues Snowflake's buying spree after picking up Crunchy Data, Datavolo and Select Star in 2025. Each deal fills another piece of the puzzle as Snowflake builds what it calls "the operating system for the AI era."

Key Points:

• Record Deal: At $1B, this is Snowflake's largest acquisition to date
• Shared History: Both companies emerged from Sutter Hill Ventures' portfolio
• AI Focus: Solution targets growing pains from enterprise AI adoption
• Performance Claims: Promises 10x faster issue detection and resolution
• Open Ecosystem: Maintains compatibility with major industry standards