Snowflake makes its biggest bet yet on observability with planned Observe acquisition

Snowflake just put a billion‑dollar-sized marker on observability.

The cloud data giant signed a definitive agreement to acquire Observe, an observability startup that has been built on top of Snowflake’s own data platform since day one. The deal, announced January 8 and still subject to regulatory approval, would give Snowflake a native way to store and analyze the firehose of telemetry data modern systems generate.

Terms weren’t disclosed, but reports peg the price at around $1 billion. If that holds, this would be Snowflake’s largest acquisition to date, edging past its roughly $800 million purchase of Streamlit in March 2022.

Why Snowflake wants Observe

Observe sells an observability platform that lets companies ingest logs, metrics, and traces into a centralized Snowflake database and then query that data to track performance issues and bugs across their software and data stacks.

Snowflake plans to fold Observe directly into its own product so customers can use a single platform to collect, store, and analyze telemetry data. The company says this will help teams monitor their data stack and “spot and fix issues 10x faster than before,” according to a Snowflake blog post cited in the announcement.

That promise is aimed squarely at one of the nastiest side effects of the AI boom: scale. AI agents and data-heavy applications generate huge volumes of machine data. Traditional monitoring tools struggle to keep up, especially when data lives in different systems. By keeping observability data inside Snowflake, the company is betting it can give customers a more scalable way to debug and tune their AI-era infrastructure.

The combined offering is also designed around open standards. Snowflake says the unified telemetry framework will be built on Apache Iceberg and OpenTelemetry, signaling that it wants to play nicely with the broader data and observability ecosystem rather than lock customers into proprietary formats.

A long-running relationship

This deal didn’t come out of nowhere. Observe and Snowflake have been intertwined for years.

Observe was founded in 2017 by Jacob Leverich, Jonathan Trevor, and Ang Li. It launched its first observability product, built on a centralized Snowflake database, in 2018.

Both companies were incubated at Sutter Hill Ventures. Sutter Hill managing director Mike Speiser served as Snowflake’s founding CEO from 2012 to 2014, helping steer the company in its early years.

Observe has since raised nearly $500 million in venture capital from investors including Snowflake Ventures, Sutter Hill Ventures, and Madrona, among others. PitchBook data cited in the announcement puts Observe’s most recent valuation at $848 million as of July 2025.

There are also strong people ties at the top. Jeremy Burton, Observe’s current CEO, has sat on Snowflake’s board of directors since 2015. That kind of boardroom overlap typically makes integrations smoother – and makes it more likely the acquisition has been in the works for some time.

Consolidation in the age of AI

Snowflake is far from alone in trying to bulk up through M&A as AI reshapes the data stack, but it’s moving aggressively.

2025 was already a busy year for the company on the acquisition front. Snowflake completed and announced several AI- and data-related deals, including:

• Crunchy Data
• Datavolo
• Select Star, a data governance and metadata management platform that helps organizations understand and trace their data at scale.

Last year also saw a broader wave of consolidation across the data industry, as vendors tried to become one-stop shops in an increasingly complex AI landscape. The planned Observe acquisition is a clear signal that the roll‑up isn’t slowing down in 2026.

By pulling observability directly into its core data platform, Snowflake isn’t just filling a feature gap. It’s staking a claim that the future of monitoring and debugging – especially for AI-intensive workloads – will live where the data already is.

If regulators sign off, Snowflake customers could soon see their data warehouse, AI workloads, and observability stack converge on a single platform. For observability startups that don’t own their own data layer, that’s a shot across the bow.