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AI Applications Expand Under DigitalOcean's $111 Million Acquisition of Paperspace

The acquisition will “revolutionize” how SMBs and startups harness the power of the cloud and AI/ML, an exec said.

Claudia Adrien

July 7, 2023

2 Min Read
AI and Cloud, AI applications
JLStock/Shutterstock

DigitalOcean says it will enhance customers’ ability to easily test, develop and deploy AI applications and machine learning tools with its acquisition of Paperspace, a cloud computing startup that also focuses on artificial intelligence. DigitalOcean purchased Paperspace for $111 million.

Through the acquisition, DigitalOcean, which bills itself as the cloud for SMBs and startups, will augment and enhance existing AI/ML applications and utilize GPUs in ways that have predominantly been the domain of large enterprises.

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DigitalOcean’s Yancey Spruill

Yancey Spruill, CEO of DigitalOcean, said the company will expand its portfolio with simplified AI/ML offerings.

“This acquisition marks a significant milestone in DigitalOcean’s journey to revolutionize how SMBs and startups harness the power of the cloud and AI/ML for their applications and businesses,” Spruill said. “The combined offerings allow customers to focus more on building applications and growing their businesses and less on the infrastructure powering them.”

AI Applications and Leveraging GPUs

The increasing demand for AI/ML cloud solutions makes Paperspace’s GPU-powered infrastructure and AI/ML focused software stack valuable additions to DigitalOcean’s portfolio, the company said. Like DigitalOcean’s approach to the cloud, Paperspace simplifies the AI/ML experience, enabling easy and cost-effective experimentation and production across various AI/ML use cases, such as generative media, text analysis and natural language understanding, recommendation engines, image classification and others.

Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.

The companies said the acquisition benefits both organizations’ customers. Paperspace’s customers will now have access to a broader cloud services platform and will also gain access to DigitalOcean’s extensive documentation, tutorials and support system to help them build and deploy AI applications. DigitalOcean customers exploring or already building AI/ML applications will now be able to leverage GPUs alongside their CPU workloads. Together, DigitalOcean and Paperspace will provide smaller businesses and startups with a comprehensive suite of cloud offerings, advanced networking, and the flexibility to harness both GPU and CPU capabilities as AI/ML technologies evolve and demand increases.

Additionally, Paperspace will benefit from DigitalOcean’s self-serve model and go-to-market strategy. The acquisition expands DigitalOcean’s serviceable market and presents cross-sell and upsell opportunities for both entities, leveraging DigitalOcean’s mature platform, efficient marketing engine and its extensive customer base to drive growth, the companies said.

Want to contact the author directly about this story? Have ideas for a follow-up article? Email Claudia Adrien or connect with her on LinkedIn.

About the Author(s)

Claudia Adrien

Claudia Adrien is a reporter for Channel Futures where she covers breaking news. Prior to Informa, she wrote about biosecurity and infectious disease for a national publication. She holds a degree in journalism from the University of Florida and resides in Tampa.

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