DigitalOcean Holdings Inc. (NYSE: DOCN) announced it has commenced an underwritten public offering of $700 million in common stock shares. The cloud computing company also granted underwriters a 30-day option to purchase up to an additional $105 million in shares.

The company plans to use proceeds to invest in additional infrastructure capacity beyond previously announced plans to support customer demand for its cloud and AI platform. DigitalOcean also intends to strengthen its balance sheet by paying down its existing Term Loan A and fund general corporate purposes.

DigitalOcean stated it is in advanced discussions to secure additional data center capacity to support growth. The offering remains subject to market and other conditions, with no assurance regarding completion timing or final terms.

J.P. Morgan, Morgan Stanley and BofA Securities serve as joint book-running managers for the offering. The company is conducting the offering through its effective shelf registration statement on Form S-3 filed with the Securities and Exchange Commission.

DigitalOcean describes itself as an "Agentic Inference Cloud" platform that combines GPU infrastructure with cloud services for AI-native and digital-native enterprises. The company reports serving more than 640,000 customers for cloud and AI infrastructure services.