DigitalOcean to Add 75 Megawatts of Capacity in 2027

The cloud provider's third-quarter revenue rose 40% to $321.2 million as it expands AI infrastructure.

Updated on Nov. 4, 2026 in Data Centers

Isometric editorial illustration of rows of dark server-rack cabinets in a hall with overhead cooling pipe and cable trays, in muted oxblood, teal, and mustard. — DigitalOcean expects to bring about 75 megawatts of new data-center and GPU capacity online in 2027, funded largely through equipment financing. AI Illustration. Upload story photo >

DigitalOcean plans to bring about 75 megawatts of capacity online during 2027 through new data centers and GPU capacity. Management believes equipment financing can fund most of that growth.

Why it matters

The expansion ties the company's AI customer growth to a large near-term buildout, with its funding plan relying on financing rather than cash alone. The plan matters for U.S. readers tracking how cloud providers are scaling AI infrastructure.

DigitalOcean reported a 20% trailing 12-month adjusted free cash flow margin and about $1.2 billion in total liquidity, with an agreement allowing up to $1 billion in common-stock sales. The company has not stated how its planned gross margin pressure will compare with prior periods.

The players

DigitalOcean

DigitalOcean is a cloud infrastructure provider serving developers and businesses, and it is expanding its GPU and data center capacity for AI workloads.

Padmanabhan Srinivasan

Padmanabhan Srinivasan is the chief executive officer of DigitalOcean, who linked the quarter's results to capabilities for agentic systems.

The details

DigitalOcean CEO Padmanabhan Srinivasan tied the quarter's performance to capabilities for agentic systems, and token volume grew by an order of magnitude. The company expects newer, token-efficient GPUs to raise annual recurring revenue per megawatt, though new data centers and GPU capacity can weigh on gross margins before utilization ramps up.

2027: Planned bringing of about 75 megawatts of capacity online
Third quarter: Revenue rose 40% to $321.2 million

The Tech Race

DigitalOcean's plan to add 75 megawatts in 2027 follows the broader pattern of cloud providers building GPU capacity to serve AI workloads. Its ability to raise annual recurring revenue per megawatt will determine whether it can keep pace with larger rivals in the AI infrastructure race.

Customers using DigitalOcean's cloud services could see new AI capabilities as capacity comes online in 2027. Pricing and performance for developers depend on how quickly the company converts new GPU capacity into revenue.

The takeaway

Watch whether DigitalOcean's new capacity lifts revenue per megawatt as expected, since gross margins may tighten before utilization ramps up. Investors and developers can track quarterly results for evidence of that shift.