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Snowflake Acquires Observe AI: What It Means for Datadog, Splunk & the Rest!

Snowflake just made a quiet but intriguing move that could reshape how enterprises handle observability at scale. On January 8, 2026, the cloud data giant announced its plan to acquire Observe, a startup specializing in AI-powered observability. The deal terms haven’t been disclosed, but the implications are already sparking debate in tech circles. This isn’t just another tuck-in acquisition. It’s a strategic play to position Snowflake at the heart of enterprise observability — a critical piece of modern cloud architecture — as AI goes mainstream. Snowflake is already riding high. Product revenue hit $1.16 billion in Q3 FY26, up 29% year-over-year. AI is powering that growth. In fact, over 7,300 customers used Snowflake’s AI tools weekly last quarter, and AI drove 50% of new bookings. Now, with Snowflake acquires Observe AI making headlines, the company’s looking to stitch together a broader data lifecycle offering, with observability as a cornerstone.