Microsoft Acquires Osmos to Supercharge Fabric AI Data Engineering

Microsoft announced the acquisition of Osmos, an agentic AI data engineering platform, on January 2026, aiming to embed autonomous data processing directly into Microsoft Fabric. This move targets simplifying complex data workflows, turning raw OneLake data into analytics- and AI-ready assets at unprecedented speeds.

Osmos specializes in agentic AI, where intelligent agents autonomously handle data ingestion, transformation, and orchestration tasks that traditionally consume weeks of manual effort. Post-acquisition, these capabilities integrate into Fabric's ecosystem, enhancing Data Engineering, OneLake governance, and AI-powered catalog features already rolling out in January 2026.

Fabric, Microsoft's unified analytics platform, now gains 'agentic data engineering'a term describing AI agents that reason, plan, and execute data pipelines without constant human oversight. For instance, Osmos agents can detect data anomalies, suggest schema optimizations, and auto-generate ETL (Extract, Transform, Load) code based on natural language prompts, all within OneLake's boundaryless data lake.

The acquisition aligns with Fabric's January 2026 feature summary, including AI Auto-Summary for semantic models (Preview), Parent-Child hierarchy in OneLake catalog, and enhanced Git integration for GitHub Enterprise Cloud. Osmos extends this by introducing agentic workflows: imagine an AI agent scanning OneLake shortcuts, identifying stale datasets, and triggering real-time refreshes via Eventhouse accelerated shortcutsnow with date-time column support and Copilot querying.

• OneLake Enhancements: Agents control data freshness latency and simplify KQL syntax for shortcut queries.
• Real-Time Intelligence: MQTT v3 support and Real-Time Weather Connector integrate seamlessly with Osmos agents for private network streaming.
• Data Factory Pipelines: Python SDK for Fabric REST API (Preview) enables agent-orchestrated automation.

Background: Microsoft Fabric launched in 2023 as a SaaS analytics service spanning data movement, processing, and insights. By FY26 Q2 (ended Dec 2025), Intelligent Cloud revenue hit $32.9B, up 29% YoY, driven by Azure's 39% growthFabric contributes via OneLake's semantic layer.

Timed with Microsoft's FY26 Q2 earnings on January 28, 2026, where total revenue reached $69.6B (GAAP, up 60% YoY wait nowait, press release details $135B? Clarify: Q2 revenue $69.6B, full highlights show Cloud at $50B+. Satya Nadella emphasized AI diffusion: "Microsoft has built an AI business larger than some of our biggest franchises." Osmos accelerates this, pushing the 'AI stack' frontier.

Azure and other cloud services grew 39%, LinkedIn 11%, Dynamics 365 19%Osmos positions Fabric to capture more of the $100B+ data engineering market. Challenges remain: OpenAI investment impacts showed $939M positive in revenue but ($7.6B) nethighlighting AI capex intensity.

For enterprises, this means reduced data silos. A retail firm could deploy Osmos agents to unify sales data from Azure, on-prem SQL, and IoT streams into Fabric, enabling real-time Copilot-driven forecasts. Westpac Bank's Copilot+Azure sandbox (cited in related blog) exemplifies scalable AIOsmos amplifies such deployments.

Competitors like Databricks (Unity Catalog) and Snowflake (Unistore) face pressure; Microsoft's agentic edge leverages Copilot Studio for custom agents. Developers gain from Git commit to standalone branches and Item Reference Variable Type (Preview).

Looking ahead, FabCon Atlanta (March 16-20, 2026) will demo Osmos in action. Risks include integration hurdles and data privacy in agentic systemsMicrosoft stresses 'Intelligence + Trust' via Fabric IQ.

More Personal Computing dipped 3% to $14.3B, Xbox down 5%, but Fabric's momentum offsets via Azure synergy. This acquisition cements Microsoft's lead in agentic analytics, promising 10x workflow speedups for data teams.