On Thursday, the cloud hosting company DigitalOcean announced that it shall be acquiring the New York-based AI startup company Paperspace for $111 million in cash. The deal is set to revolutionize DigitalOcean’s offerings, enabling the company to cater to the rapidly growing demands of the artificial intelligence and machine learning (AI/ML) industry and establish a strong foothold in the market.
The acquisition comes at a time when the utilization of AI/ML technologies is on the rise, with numerous industries incorporating these cutting-edge tools into their operations. Recognizing the immense potential of GPU-accelerated infrastructure in this field, DigitalOcean has taken a significant step towards expanding its services with the aim of helping SMBs and businesses with budget constraints to build, train and deploy their AI applications.
“We’re excited to expand our portfolio tailored to the world’s small- and medium-sized (SMBs) businesses and startups with simplified AI and machine learning offerings,” Yancey Spruill, the CEO of DigitalOcean said in a press release. “The combined offerings allow customers to focus more on building applications and growing their businesses and less on the infrastructure powering them.”
Despite the acquisition, DigitalOcean has confirmed that Paperspace will continue to operate as an independent business unit for the time being. Although immediate changes to the services provided by Paperspace will not be apparent to customers, they can look forward to numerous advantages in the future. The integration of Paperspace’s platform, which features a browser-based implementation of the Jupyter Notebook and high-performance Nvidia A100 graphics card series, with DigitalOcean’s expanded array of cloud services, including databases, storage, application hosting, comprehensive documentation, tutorials, and a support system, will bring significant benefits to users.
The acquisition is expected to have far-reaching implications for both DigitalOcean and Paperspace customers. It signifies DigitalOcean’s commitment to expanding its product offerings and enhancing its competitiveness in the AI industry. Meanwhile, Paperspace customers can look forward to benefiting from DigitalOcean’s extensive global infrastructure and robust developer community.
“DigitalOcean is renowned for simplifying complex cloud technologies and making them more accessible to developers and businesses alike,” said Dillon Erb, Co-founder and CEO of Paperspace. “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.”
DigitalOcean speculates that the acquisition of Paperspace will not have a significant impact on its financial results for the year 2023. However, the company believes that the integration of Paperspace’s platform will begin to accelerate and reflect its revenue growth starting in the long term.
According to Gartner, cloud spending will grow to an exponential 21.7% in 2023 and will continue growing well into 2024. As the cloud computing landscape continues to evolve, this acquisition serves as a testament to the importance of specialized infrastructure in supporting the advancements in AI and machine learning. DigitalOcean’s acquisition of Paperspace sets the stage for a new era of innovation, where developers can leverage the combined power of both companies to push the boundaries of AI and reshape industries across the globe.