Instacart’s IPO filing sparked an online spat between cloud rivals Snowflake and Databricks

Published

2 years ago

September 2, 2023

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A banner for Snowflake Inc. is displayed at the New York Stock Exchange to celebrate the company’s initial public offering, Sept. 16, 2020.

Brendan McDermid | Reuters

Buried on page 280 of Instacart’s IPO filing last week was a paragraph that caused a brouhaha between two companies that have nothing to do with grocery delivery.

One of Instacart’s board members is Frank Slootman, the CEO of Snowflake, a publicly traded company that helps businesses store and manage hefty workloads in the cloud. Slootman joined Instacart’s board in 2021 and, because of that relationship, the company has to disclose its business ties to Snowflake.

On first blush, the Instacart spending figure looks troubling for Snowflake.

Instacart said it “made payments to Snowflake” of $13 million in 2020, a number that increased to $28 million in 2021 and $51 million in 2022 for the company’s “cloud-based data warehousing services.” The 2023 numbers appear to show a reversal, with Instacart saying “we anticipate we will pay Snowflake approximately $15 million” for the full year.

That would be a frightening 71% drop in payments.

But Snowflake would later say that those figures don’t tell the real story, a fact that’s mostly backed up by a footnote even deeper in the prospectus.

In the meantime, chaos ensued.

Employees of Snowflake rival Databricks pounced. They took to social media to highlight the apparent decline in spending on Snowflake and to suggest that it was the result of Instacart moving workloads to Databricks infrastructure.

Snowflake staffers fired back, claiming the numbers were being taken out of context, and accused Databricks of consistently spinning the narrative that it was taking business from Snowflake.

Many of the posts on Reddit, LinkedIn and X, the site formerly known as Twitter, have since been deleted.

Instacart did some deleting of its own.

In May, the company published a blog post titled “How Instacart Ads Modularized Data Pipelines With Lakehouse Architecture and Spark.” The post, which described software underpinning Instacart’s ads infrastructure, included discussion of a migration to Databricks’ Lakehouse technology and the cost savings that followed.

However, that blog was taken down as questions began to swirl following the IPO filing. A reader looking for the post now ends up on a page that says, “You’ve landed in the 404 errorverse.” Databricks also took down a case study detailing Instacart’s use of its technology, though its website still has presentations from earlier this year on the topic.

Representatives from Instacart, Snowflake and Databricks declined to to comment.

The controversy, which only came to light because Slootman is on Instacart’s board, has fanned the flames of a fierce rivalry between two companies battling it out in one of the hottest corners of technology, where cloud, data and artificial intelligence collide. It’s a conflict that’s made its way to social media plenty of times in the past, so much so that one Reddit user wrote a post a few months ago, titled “Databricks and Snowflake: Stop fighting on social.” A commenter responded, “Is this the pro-wrestling of data engineering?”

FALMOUTH, MA – APRIL 8: Instacart shopper Loralyn Geggatt makes a delivery to a customer’s home during the COVID-19 pandemic in Falmouth, MA on April 7, 2020. Some Amazon, Instacart and other workers protested for better wages, hazard pay and sick time. (Photo by David L. Ryan/The Boston Globe via Getty Images)

Boston Globe

Snowflake went public in 2020, raising over $3 billion in the biggest U.S. IPO ever for a business software company. Even after last year’s market plunge, Snowflake has a market cap of over $50 billion.

Databricks is still private, but it’s one of the most richly valued venture-backed companies. Private investors valued the company at $38 billion in 2021, and Bloomberg reported last week that the company was in talks to raise funding at a $43 billion valuation.

To expand in AI, Snowflake recently acquired AI search engine Neeva for $185 million, while Databricks spent $1.3 billion on generative AI startup MosaicML.

What’s the real story with Instacart?

That brings us back to Instacart.

While Databricks is picking up business from the grocery-delivery company, the footnote in Instacart’s S-1 spelling out the relationship with Snowflake shows that the spending decline in 2023 is not the most relevant figure.

Rather, when it comes to how Instacart accounts for operating expenses — its actual usage of Snowflake — that amount was $28 million in 2021, $28 million 2022, and then $11 million in the first half of 2023. That’s still a drop this year, but on an annualized basis it would be around 21% instead of 71%.

To add to the confusion, the footnote under “Related Party Transactions” didn’t name Slootman or Snowflake, referring only to a “an executive officer of a software vendor.”

With the online chatter picking up, Snowflake wanted to clear up the picture, at least from its point of view. On Wednesday, the company published a four-paragraph blog post titled, “Snowflake and Instacart: The Facts.”

“In the past few days, the scope and trajectory of Instacart’s use of Snowflake has been misrepresented by some on social media,” the post begins. Nowhere is Databricks mentioned in the post, a consistent theme for Snowflake, which doesn’t name Databricks as a competitor in its financial filings.

Snowflake went on to say that it was working with Instacart to “optimize for efficiency,” a phrase that implies doing more with less, and that its technology is “used extensively by nearly every team within Instacart, including the catalog team, machine learning, ads, shoppers, retailers, customers, and logistics organizations.”

The post then highlights the usage figures from the filing footnote and claims that, “In some social media posts, payment schedules have been incorrectly conflated with actual usage to suggest a large decline in spending — this is not the case.”

In other words, if there’s a decline in spending, it’s not because we’re losing business to an unnamed company.

The good news for Snowflake is that the IPO process callsfor multiple prospectus updates. Instacart, which is trying to unlock a tech IPO market that’s been largely frozen for 20 months, will get a chance to clear up the matter with investors very soon.

— CNBC’s Jonathan Vanian and Jordan Novet contributed to this report.

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Technology

Okta shares fall as company declines to give guidance for next fiscal year

Published

2 hours ago

December 2, 2025

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Okta shares fall as company declines to give guidance for next fiscal year

Cheng Xin | Getty Images

Okta on Tuesday topped Wall Street’s third-quarter estimates and issued an upbeat outlook, but shares fell as the company did not provide guidance for fiscal 2027.

Shares of the identity management provider fell more than 3% in after-hours trading on Tuesday.

Here’s how the company did versus LSEG estimates:

Earnings per share: 82 cents adjusted vs. 76 cents expected
Revenue: $742 million vs. $730 million expected

Compared to previous third-quarter reports, Okta refrained from offering preliminary guidance for the upcoming fiscal year. Finance chief Brett Tighe cited seasonality in the fourth quarter, and said providing guidance would require “some conservatism.”

Okta released a capability that allows businesses to build AI agents and automate tasks during the third quarter.

CEO Todd McKinnon told CNBC that upside from AI agents haven’t been fully baked into results and could exceed Okta’s core total addressable market over the next five years.

“It’s not in the results yet, but we’re investing, and we’re capitalizing on the opportunity like it will be a big part of the future,” he said in a Tuesday interview.

Revenues increased almost 12% from $665 million in the year-ago period. Net income increased 169% to $43 million, or 24 cents per share, from $16 million, or breakeven, a year ago. Subscription revenues grew 11% to $724 million, ahead of a $715 million estimate.

For the current quarter, the cybersecurity company expects revenues between $748 million and $750 million and adjusted earnings of 84 cents to 85 cents per share. Analysts forecast $738 million in revenues and EPS of 84 cents for the fourth quarter.

Returning performance obligations, or the company’s subscription backlog, rose 17% from a year ago to $4.29 billion and surpassed a $4.17 billion estimate from StreetAccount.

This year has been a blockbuster period for cybersecurity companies, with major acquisition deals from the likes of Palo Alto Networks and Google and a raft of new initial public offerings from the sector.

Okta shares have gained about 4% this year.

WATCH: Earnings will drive small cap outperformance, says Bank of America’s Jill Carey Hall

Technology

Marvell to acquire Celestial AI for as much as $5.5 billion

Published

3 hours ago

December 2, 2025

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Marvell to acquire Celestial AI for as much as .5 billion

Marvell Technology Group Ltd. headquarters in Santa Clara, California, on Sept. 6, 2024.

David Paul Morris | Bloomberg | Getty Images

Semiconductor company Marvell on Tuesday announced that it will acquire Celestial AI for at least $3.25 billion in cash and stock.

The purchase price could increase to $5.5 billion if Celestial hits revenue milestones, Marvell said.

Marvell shares rose 13% in extended trading Tuesday as the company reported third-quarter earnings that beat expectations and said on the earnings call that it expected data center revenue to rise 25% next year.

The deal is an aggressive move for Marvell to acquire complimentary technology to its semiconductor networking business. The addition of Celestial could enable Marvell to sell more chips and parts to companies that are currently committing to spend hundreds of billions of dollars on infrastructure for AI.

Marvell stock is down 18% so far in 2025 even as semiconductor rivals like Broadcom have seen big valuation increases driven by excitement around artificial intelligence.

Celestial is a startup focused on developing optical interconnect hardware, which it calls a “photonic fabric,” to connect high-performance computers. Celestial was reportedly valued at $2.5 billion in March in a funding round, and Intel CEO Lip-Bu Tan joined the startup’s board in January.

Optical connections are becoming increasingly important because the most advanced AI systems need those parts tie together dozens or hundreds of chips so they can work as one to train and run the biggest large-language models.

Currently, many AI chip connections are done using copper wires, but newer systems are increasingly using optical connections because they can transfer more data faster and enable physically longer cables. Optical connections also cost more.

“This builds on our technology leadership, broadens our addressable market in scale-up connectivity, and accelerates our roadmap to deliver the industry’s most complete connectivity platform for AI and cloud customers,” Marvell CEO Matt Murphy said in a statement.

Marvell said that the first application of Celestial technology would be to connect a system based on “large XPUs,” which are custom AI chips usually made by the companies investing billions in AI infrastructure.

On Tuesday, the company said that it could even integrate Celestial’s optical technology into custom chips, and based on customer traction, the startup’s technology would soon be integrated into custom AI chips and related parts called switches.

Amazon Web Services Vice President Dave Brown said in a statement that Marvell’s acquisition of Celestial will “help further accelerate optical scale-up innovation for next-generation AI deployments.”

The maximum payout for the deal will be triggered if Celestial can record $2 billion in cumulative revenue by the end of fiscal 2029. The deal is expected to close early next year.

In its third-quarter earnings on Tuesday, Marvell earnings of 76 cents per share on $2.08 billion in sales, versus LSEG expectations of 73 cents on $2.07 billion in sales. Marvell said that it expects fourth-quarter revenue to be $2.2 billion, slightly higher than LSEG’s forecast of $2.18 billion.

WATCH: Nvidia GPUs to Google TPUs: Breaking down all the AI chips