Snowflake said on 8 January it had signed a definitive agreement to acquire Observe, a provider of AI-powered observability software, without disclosing the price.
Why Snowflake Inc. is buying Observe, Inc.
Snowflake said reliability had become a core business concern as customers build AI agents and data applications, and that Observe's AI site reliability engineer would move them from reactive monitoring to automated troubleshooting. The deal extends Snowflake into the IT operations management software market, which it put at $51.7bn in 2024 citing Gartner, using open standards such as Apache Iceberg and OpenTelemetry to keep full telemetry data at lower cost.
“Observability is fundamentally a data problem”
Deal terms and financing
Terms were not disclosed at signing. TechCrunch, citing The Information, reported a value of about $1bn, which would have made it Snowflake's largest acquisition. Snowflake's quarterly report for the period to 30 April 2026 later put the preliminary purchase consideration at $595.8m, comprising $285.7m in cash, $285.3m in common stock and the fair value of Snowflake's existing minority stake.
Regulatory approvals and timing
The deal was subject to regulatory approvals and customary conditions. Snowflake completed the acquisition on 2 February 2026, according to its Form 8-K, which said the deal had been approved by a special committee of independent directors and the audit committee.
Market context
Observe was founded in 2017, incubated at Sutter Hill Ventures and had raised $316m from investors including Snowflake Ventures, Sutter Hill and Madrona, according to TechCrunch. Its chief executive Jeremy Burton had sat on Snowflake's board since 2015 and resigned from it in connection with the deal.
