DigitalOcean Seeks $800M in Funding | Hacker News Reader

DigitalOcean Seeks $800M in Funding

datacenterdynamics.com

71 pointsherbertl57 comments

When Colorado passed the wage disclosure law and Digital Ocean decided not to hire in Colorado anymore despite being founded in Colorado is when I decided to never use them. I dont care if they eventually started hiring people in Colorado again.

God forbid people have a sense of their potential compensation before spending hours applying to a job! Good for Colorado passing that law. Shame on Digital Ocean for skirting around it.

I don't even look at jobs anymore that don't have salary information.

I feel that even if you're not required to post it, the fact that you don't post it means you're underpaying.

The only reference I can find to this is a Business Insider story[0], and they are known for salacious and dishonest articles.

It looks like they paused hiring for some number of weeks after the law was passed, probably because someone forgot to update the job listings and run interference on the salaries.

That's what you're upset about?

[0]https://www.businessinsider.com/digitalocean-pauses-hiring-i...

Long are the days of DO being a super hoster imho. Hetzner and many other "cheap" clouds ate their breakfast and their reaction was pretty much zero.

Still an awesome service and platform.. but no longer worth it price wise as it once was. Same with Vultr..

I guess at some point all investors just pressure these companies into price matching AWS and other pay-for-every-single-thing-ever companies.

I once saw Vultr as a cheaper DigitalOcean, but now they're super-expensive, too.

For the same money, I get 10x of RAM, storage and CPU with Hetzner or OVH.

They also have the extremely annoying practice where if you owe them as little as $3, they still automatically recharge your account $100.

Vultr is pretty cool, but I was paying $10/mo for a 2 v-cores/2gb/55gb. I got a 'root server' with netcup and I'm now paying $11/mo for 4 cores/8gb/256gb nvm-e. Unfortunately the placement isn't what I hoped as it's in Virginia. I would've liked Singapore but the cost would be twice as much.

I hope they don't bet too much on AI, but I do think they deserve to grow more as a cloud provider, they need to focus strongly on following up on people's complaints about their existing services. I have seen many threads of people with complaints about their S3 compatible storage being very limited in its design, and potentially wildly insecure. If they are serous enough to be asking for roughly a billion dollars, they should really consider fixing up their current offering either first or at the same time. It's only a matter of time before some giant scandal has customers running away.

I say this having used DO since... 2012?

I hope they don't bet too much on AI

Based on DO's monthly newsletters, all it cares about anymore is AI.

I don't think its written a single bullet point in two years that wasn't about AI.

It's as if some wave of amnesia came over DO and it forgot it has thousands of existing customers who are not AI wantrapreneurs.

Come on, this is plain wrong, fortunately.

I'm subscribed to the DO newsletter; let me skim the archive. What they introduced in the last couple of years was: per-second billing, various identity providers for their SSO, managed Postgres upgrades, storage autoscaling, a NAT gateway, "bring your ow IP", etc. Yes, they do actively build out their GPU offerings, and access to open-weight models, but it's by far not the only thing.

There's a lot of AI fatigue to be fair, so its very easy to overlook the non-AI things too.

Come on, this is plain wrong, fortunately.

DigitalOcean newsletter for March 20,2026:

- Deploy 2026: The Production Inference Era

- DigitalOcean at NVIDIA GTC 2026: Building the AI Factory for the Agentic Era

- The Proven Home for AI Agents

- The Richmond Data Center: Our newest facility engineered exclusively for AI, featuring NVIDIA HGX B300 systems and a 400 Gbps non-blocking RDMA fabric.

- Frictionless NVIDIA Partnership

- Expanded Model Catalog

- 1 click NemoClaw (Alpha) Droplet

- Network File Storage standard tier and expanded availability

7 AI items. One non-AI item. I stand by my comment.

The problem is that their current capacity is literally full. They were running a highly profitable business for the last 2-3 years and recently switched up the strategy to build more datacenters to meet the ai demand.

I can see they want to do it as they are currently demand constrained.

Update typo: Meant to say supply constrained

They occupy some weird middle ground where they've become too expensive for hobbyists but not good enough for enterprise use

> but not good enough for enterprise use

This goes back to my suggestion to strengthen their current offering instead of making a giant frankencloud. They're in an interesting unique position, if they play their cards right they could become a big player in the field, too many cards on AI might not be it though.

I love DigitalOcean to the point where I actually applied for a job there[0]. The UI is leagues better than AWS and there are really useful API endpoints to control common things. I've been a paying customer for something like 12 years and I've never had an issue.

[0] They never got back to me, sadly.

I had a job interview with one of the founders. The whole process was, by far, the worst experience I ever had in my life, and a complete waste of my time. (I interviewed for maybe 25-30 jobs in my life overall).

same

Worst job interview or worst experience overall?

Both, easily.

Their interview process sucks. They expect PhD-level experience for basic cloud operations. And since they started outsourcing to Hyderabad, they’ve gotten even worse.

Why has it gotten worse? are there more PhDs in Hyderabad?

'phd level experience' generally means 'very little real-world practical experience' lol

The UI is simpler because the product is simpler. If all you want is 1-2 VMs in the cloud and to not think about the rest, its great. For any actual business that's moved from 'hobby'/'seed' phase, its not the right platform.

Recently I could not get a dedicated CPU "droplet" in any of the datacenters they have.

For great many businesses way past the "hobby" stage, a managed DB + managed queue + managed cache + a few VMs under managed k8s + serverless functions is plenty enough. Given a right architecture, this could serve a million paying customers. When you have more, you usually have the resources to consider a more elaborate setup.

I'd say that for most businesses 3-4 VMs, or a couple of bare metal boxes, is already enough, unless they grow explosively.

Just to share something positive, I've had a ttrss instance running forever on digitalocean in NY. I like them for side projects too.

$ uptime

16:06:14 up 2802 days, 15:03, 1 user, load average: 0.00, 0.01, 0.05

$ uname -a

Linux myinstance 3.2.0-4-amd64 #1 SMP Debian 3.2.65-1+deb7u1 x86_64 GNU/Linux

I mean, who even needs a secure kernel.

Used to have a dual atom box in NYC that had over 3000 days of uptime. The hard drive died and they messaged me saying I had the last atom box in their datacenter. They gave me a dual e5 with 64gb ram for the original price of my 2gb atom box. This is how you generate loyalty. I will never leave them.

In the late 90s, I leased Cobalt RAQ servers from RackSpace. During this time, RackSpace had exceptional customer service. I could call support and be connected with a skilled Unix SysAdmin within minutes. Even though I was responsible for the entire system, the would happily login to the system and advise me how how to deal with any issues.

After about 5 years, I called to shutdown my last Cobalt server. A week later, they called to ask if they could ship me server. No Cost

Turns out it was the last of the Colbalt RAQs and the oldest server in their fleet

I just migrated my personal servers to Scaleway due the big EU migration that's happening. I did love using them as a service though, lovely interface and decent pricing. Back in the day we didn't have Claude but their documentation for setting up servers and implementing services was super useful. Wish them well in raising money.

For many personal uses something like AWS is a bit too sophisticated when you just want to spin us some instances and have a clean interface with little noise.

Scaleway is a huge abuse platform, the same IPs on their network continue day after day to blast out login and bruteforce attempts. Drop their ranges and suddenly your logs get a lot quieter with no user facing impacts.

For those who haven't been keeping up with DigitalOcean. They are done with the "Developer Cloud" and now are trying to become another enterprise similar to AWS, GCP and Azure.

They were very debt heavy before the AI boom, and are just going to make it worst because I'm assuming they aren't raising 800m to pay of that debt.

You should definitely take that into account if you are or plan on using them.

This is not a well ran company.

Let's just hope this helps their service and doesn't lead to them making it worse. I love Digital Ocean. The UI and the service itself is great. API is nice too.

As a long time paying customer of DO, I don't know how I feel about this. I've been unbelievably happy with the products I rely on (App Platform and Managed Postgres). I worry this is an attempt to play catch up in the AI space and everything else will lose focus.

Adapt or die

I've been a loyal digital ocean customer for years, I switched away from Linode way back when (for reasons I don't even remember.) I'm extremely happy with the DO service, so here's to hoping they don't screw it all up!!

yeah it's because Linode was more expensive and it had some security incidents

That's right. Wow seems like a lifetime ago. Remember Media Temple?? haha.

Back when DO came in and cut all Linode VM prices in half.

Don't risk or trust DigitalOcean with production grade stuff, it disappears and doesn't get fixed and the support stops responding or escalating when their own information clearly outlines the gaps that have occurred in their systems.

Off late my experience has been that they are pushing more around UX and support but I am recent user.

I don't trust any of the cloud providers enough to store a single copy of important data. I always have backups go to two separate S3 style endpoints in different providers, and my infrastructure is setup with scripts of some sort.

I've run production setups on DO for 12 or 13 years now though. My last company, after it was acquired, was forced into Azure. Both stability and performance tanked, while spending a little over 2x compared to what it was in DO.

Mistral AI just raised $830M to spend on datacenters, you guys should talk to them

IIRC they are a generation behind on CPUs, so must need capital to refresh/add new and competitive hardware. The default state at the bigger CSPs is to have this stuff rolling in even before it is generally available to the public.

That early access privilege, economies of scale, and access to cash flow or capital paints a somewhat dire picture for DO even ignoring "AI", although the AI boom has made physical infrastructure much more difficult to do at scale if you aren't already doing physical infra at scale.

One thing that's not super obvious, but is happening - 'AI' is increasing demand for 'normal' (e.g cpu) compute. People are building more apps because the cost of software has reduced, these need deploying somewhere. More commits == more CI runs, then there's then the 'agent' usage, things like openclaw instances etc. Just because they are expanding, it might not mean they're betting the house on more GPUs (though likely a part of it)

No one else is blocking at the firewall digital ocean ips? It got so bad that at one point I started looking up non-us digital ocean ip ranges and blocking entire ranges/countries. And I ended up blocking a lot of USA ranges too.

We are. Most of our attack traffic is from DO net blocks.

We’ve had integration partners actually move off them because we won’t allow connections.

A little late to get in on the "AI"-based hype train in order to raise money, if you ask me. I guess they've fallen victim to the investors saying "What's your AI strategy?"

What's the DigitalOcean of Europe, where I can get API-based provisioning for VPSes?

Why isn't DigitalOcean the DigitalOcean of Europe?

Regardless, I believe you can provision VPS on Hetzner Cloud via their API.

Because DO is an American company.

scaleway?

Hetzner

UpCloud

Also the Swiss infomaniak, and the French OVH.

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