DigitalOcean – the cloud for small and medium-sized businesses (SMBs) and startups – recently announced it has acquired Paperspace, a leading provider of cloud infrastructure as a service for highly scalable applications leveraging graphics processing units (GPUs). This acquisition and integration of Paperspace’s advanced technology into the DigitalOcean platform will extend DigitalOcean’s offerings, thus enabling customers to more easily test, develop and deploy artificial intelligence and machine learning (AI/ML) applications, augment and enhance existing AI/ML applications and utilize GPUs in ways that have predominantly been the domain of large enterprises.
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. 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 many others.
This deal benefits both organizations’ customers. Paperspace’s customers will now have access to a broader cloud services platform. And Paperspace customers will also gain access to DigitalOcean’s extensive documentation, tutorials and support system to assist them in their journey to build and deploy AI applications. Plus DigitalOcean customers exploring or already building AI/ML applications will now be able to leverage GPUs alongside their CPU workloads. DigitalOcean and Paperspace together 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.
Paperspace is going to benefit from DigitalOcean’s highly effective self-serve model and efficient go-to-market strategy. And 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 alignment in organizational history and culture between DigitalOcean and Paperspace will ensure a smooth integration process and a collaborative work environment. And the two companies shared values and commitment to customer success will continue to foster innovation, enhance customer experiences, and reinforce both entities as industry leaders in cloud computing.
Under the terms of the deal, DigitalOcean acquired Paperspace for $111 million in cash. And the acquisition is expected to have an immaterial impact on 2023 financial results.
KEY QUOTES:
“We are excited to expand our portfolio tailored to the world’s SMBs and startups 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. The combined offerings allow customers to focus more on building applications and growing their businesses and less on the infrastructure powering them.”
— Yancey Spruill, CEO of DigitalOcean
“DigitalOcean is renowned for simplifying complex cloud technologies and making them more accessible to developers and businesses alike. We are thrilled to join forces with DigitalOcean, as we believe there is no better company to unlock the endless possibilities of AI/Ml for developers and businesses alike.”
— Dillon Erb, Co-founder and CEO of Paperspace
“Paperspace is a rapidly growing business with leading-edge technology that significantly accelerates our AI/ML capabilities. We expect it to enhance our revenue growth in 2024 and beyond and we will invest commensurately to further accelerate its growth and take full advantage of this tremendous emerging market opportunity.”
— Matt Steinfort, DigitalOcean’s CFO
