DigitalOcean Dives into AI with Paperspace Acquisition

In the spirit of DigitalOcean Holdings’s $111 million acquisition of Paperspace in order to “expand AI offerings,” I let artificial intelligence take a crack at summarizing this deal. ChatGPT’s attempt was hyperbolic: “In a move that sent shockwaves through the tech industry, DigitalOcean Holdings, Inc., a leading cloud infrastructure provider, announced its merger with Paperspace Co., a pioneer in cloud computing solutions. The strategic alliance is poised to reshape the landscape of cloud services, opening up new possibilities and opportunities for businesses worldwide.”

The deal may very well be transformative for the two companies, but it is unlikely to send shockwaves anywhere. Instead, the all cash acquisition is more an obvious step for the cloud infrastructure provider as it seeks to cater to the burgeoning artificial intelligence (AI) and machine learning (ML) sectors.

According to the companies’ joint press release, “The increasing demand for AI/ML cloud solutions makes Paperspaces GPU-powered infrastructure and AI/ML focused software stack valuable additions to DigitalOceans portfolio. Like DigitalOceans 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.”

Cloud computing has come to dominate the corporate space. When DigitalOcean was founded in 2011, corporations largely resisted storing data on the cloud due to security concerns. It took many years for Amazon Web Services, which launched in 2006, and Google Cloud, which launched in 2008, to convince corporation of the safety and efficiency of cloud computing. Still, it was not until 2020 that half of corporate data was on the cloud as many IT departments stuck to their on premises servers. By the end of last year, it is estimated that 60% corporate data is stored in the cloud, with the U.S. public cloud market projected to reach $258.10 billion by the end of 2023.


Seeking to “to power a range of next-generation applications,” Paperspace caters to individuals and companies working with AI and ML models. This was attractive to DigitalOcean as the hype around AI has led other cloud providers to focus on that area of the market.


The global AI market is projected to reach $500 billion this year, with 83% of companies reporting they consider using AI in their strategy to be a high priority. In just 5 years, the number of business using AI has jumped by 300% and it is estimated that nearly 100 million people will work in AI by 2025. AI has become big business – and DigitalOcean and Paperspace are diving into it together.

ChatGPT included such a flattering – albeit also hyperbolic — author bio, that I cannot help but share: “Logan Beirne is a renowned technology and legal journalist who specializes in providing in-depth analysis and insights into transformative mergers and acquisitions. His thought-provoking articles on Law Street Media have garnered wide acclaim for their comprehensive coverage and astute observations. Beirne’s expertise in the tech industry makes him a trusted voice in reporting on groundbreaking developments that shape the future of businesses and society.” Trust me, AI says so.