Amid the surge of data flows and the growing complexity of AI systems, global cloud data giant Snowflake is accelerating the construction of its "one-stop" intelligent data ecosystem. On January 8, 2026, the company announced it had signed a final agreement to acquire the observability platform Observe for about $1 billion—this is not only Snowflake's largest acquisition to date, but also marks its formal deep integration of system monitoring and data governance capabilities, directly addressing new challenges in enterprise operations in the AI era.

Observe is not an ordinary startup, but rather a "biological child" that has been closely connected to Snowflake since its inception. The company was founded in 2017 by Jacob Leverich, Jonathan Trevor, and Ang Li, and launched its first observability product based on Snowflake's centralized database in 2018. More notably, Observe and Snowflake share the same origin—both were incubated by the renowned venture capital firm Sutter Hill Ventures. This firm not only appointed managing partner Mike Speiser as Snowflake's founding CEO (2012–2014), but has also long supported Observe's development. Currently, Observe's CEO Jeremy Burton has served on Snowflake's board since 2015, and their strategic synergy has long surpassed the level of capital.

The core value of this acquisition lies in addressing an increasingly severe industry pain point: as AI agents are deployed on a large scale, telemetry data generated by systems—including logs, metrics, and trace information—is growing exponentially, making it difficult for traditional monitoring tools to efficiently correlate data with application performance issues. By integrating Observe natively into the Snowflake platform, customers will be able to automatically collect, store, and analyze full-stack telemetry data within a unified environment. According to the Snowflake official blog, this move can increase users' speed in identifying and fixing data and software issues by ten times.

Technologically, Observe is built on open standards and fully compatible with Apache Iceberg and OpenTelemetry, ensuring data portability and ecosystem interoperability. Its product naturally runs on top of Snowflake, avoiding the latency and costs associated with data migration between different systems, truly achieving "observability as analysis."

This transaction also reflects the overall trend of consolidation in the data industry. In 2025, Snowflake had already acquired Crunchy Data, Datavolo, and the data governance platform Select Star, continuously strengthening its capabilities in data engineering, governance, and application development driven by AI. In the previous year, M&A activity in the data field was frequent, with companies expanding their product portfolios to provide end-to-end solutions to customers. Now, with the addition of Observe, Snowflake not only fills a key missing piece in observability but also takes a solid step toward its vision of an "operating system for the AI era"—where data storage, processing, governance, application, and monitoring will ultimately come together as one.