AI adoption is driving growth across Datadog's observability products, company executives said during its third-quarter earnings call Wednesday, but that growth appears to be slowing as companies continue to figure out where and how to spend money on AI.
“About a third of our customers now use one or more of our AI products, including three-quarters of our $100,000+ plus customers, with many of these customers still just getting started with these products, leaving a large opportunity for future expansion,” Datadog CEO and co-founder Olivier Pomel said on the earnings call. Overall, the share of customers using 10 products rose to 16% in the quarter, from 13% in the second quarter of this year, while customers using eight products rose to 26% from 22% in Q2, he said.
So-called "AI native" companies are driving a lot of that growth, Pomel said, but enterprise customers are also starting to adopt its AI products, including the US military and “two of the three largest Japanese banks," he said. “This is definitely a new side of the business that we did not necessarily have before,” he said.
The company said that as of September 30, 2026, it had 4,860 customers with ARR of $100,000 or more, up 20% from the corresponding quarter of 2025, according to the earnings release.
