6 ms·

It really is an absolute massive jump. Have no clue what's going on in the back to warrant a 3x increase... 25-50%, sure.. but 3x is wild.

drewg123 4mo ago
The AI bubble has increased the prices of nand and ram by a factor of 4, so a 3x increase seems reasonable. Companies that are not big enough to have long term contracts with ram/nand vendors have been hit really, really hard by this.
- Aissen 4mo ago
  It's a bit higher than 4 now.
  - microtonal 4mo ago
    They probably also have to factor in the pricing trajectory to avoid changing their pricing too often.
  - magicalhippo 4mo ago
    I almost pulled the trigger on a 2x64GB 6400MHz CL36 kit for about $650 last August. It's been insane since the spike happened, but went down somewhat last month. I just checked and it has gone up $1500 since then to $5000. So that's over 7.5x what it was when I (sadly) did not buy it. Totally not kicking myself for dragging my heels on that purchase... Cheapest 2x48GB kit I can find here now is $1500, yay. That's 5200MHz CL48 stuff.
- WhereIsTheTruth 4mo ago
  There is no AI bubble There is an engineered scarcity, billion dollar companies can't ramp up production? Murica is stuck depending on the good will of Korea and China for thinking rocks? le fucking mao
  - duttish 4mo ago
    As I understand it ramping up a new fab takes a couple of years and several billion dollars. The last time they ramped up production prices had crashed back down by the the time the new fab was fully up and running, so this time they're betting that the scarcity will resolve itself like it did last time.
    - gmerc 4mo ago
      They are not ramping up.
      - mrweasel 4mo ago
        Because they think it may be a bubble. If it's not, no harm done to the hardware manufacturers, they just make more money per unit, but if it is a bubble, they don't want to be stranded with excess capacity.
        dabinat 4mo ago
        There is potential harm if it’s not a bubble and their competitors scale and capture more of the market and they don’t. That’s why CXMT is a real wildcard - they could use this situation to become a big player.
        chadgpt3 4mo ago
        Or even if it is a bubble and we all develop brand loyalty to the competitors who scaled.
      - Sohcahtoa82 4mo ago
        I'm trying to understand the intent of your comment. The person you're replying to explained why they're not ramping up, and you replied "They are not ramping up", which seems awfully silly.
    - benjiro29 4mo ago
      They are scaling up, but most will only come online in end 2027-2028 time frame. And Memory, as in what we use in PCs is easier to manufacture then HBM memory. But all the money is in HBM ... So for every ~4GB of memory that you can produce in normal DDR5, you can only make 1GB of HBM. But you make multiple times the revenue. The demand for HBM memory is not going to go away. LLMs are memory bandwidth hungry, and we are going to see production going to AI. But also to "lower end" like B200's. That means, they are producing multiple times less memory (if we look for the normal market demand), but still need to produce more for the memory bandwidth hungry market. We are seeing more products entering the "prosumer/business" market that are also memory bandwidth hungry. This demand will not go away. It will actually increase as companies move to more localized workloads. There is is a issue with data privacy that a lot of companies legally deal with. The lacking ramp up is not a sign of them being scared of over production, its a realization that 3 companies hold the market in a strangle hold, and "slow" scale. If everybody plays friendly, they can milk this for years. China is a solution but China does not have the HBM production levels, and will take years to scale and put a dent in the market. And China is ... allocating a lot to domestic production of AI > HBM ... The reality is, that unless competition ( as in China ) does not start scaling beyond the expected levels, the big 3 have no reason to scale too fast. And money is not the issue ... have you seen their revenue (and net profit!! ) numbers. A few billions is peanuts for them at this point. They simply do not want to scale too fast because that means less milking ... Memory demand is not going to away. When people talk about the AI bubble popping, its more in terms of the stock market. The product is here and not going away.
- benjiro29 4mo ago
  These prices have absolute nothing to do anymore with memory prices. Do not forget that Hetzner already increased the setup fees by a factor of 4x before to compensate for the price. And also servers getting price increases. It seems they have shifted by reducing the setup fees, and increasing the monthly costs. As this generates more revenue. And its easy to prove this... AX42 ... Its 8700GE that has gone from 65 Euro to 225 Euro. With the setup fee now being 112 Euro instead of 225 Euro. It has 64GB memory, and 1TB storage. The storage even in todays market is 100 Euro. The memory is 644 Euro. Do the math ... Hetzner servers had a hardware payback periode of between 9 to 11 month if you took the market value. This calculation has always been very stable over the 20 years i used Hetzner. This new price, reduced the hardware payback periode to ~4 month. It seems to be that Hetzer is trying to use the memory price issues, as a excuse. The revenue of those same servers now increased to a insane level. More revenue with less hardware. The real issue is that a lot of companies are moving from US hosting to EU hosting because of the problems with the US. Hetzner sees this as the perfect time to cash in on Enterprise customers. They have been trying to replace the "cheap" normal consumers with enterprise. This trend has been going on for a while already. Every customer that now leaves, is a server they can rent out to business customers. If you want to see the same thing, look up what happened to Microsoft/Github Copilot where they turn around has been sudden and very strong, with a clear goal of moving everything to enterprise.
  - mschuster91 4mo ago
    > It seems they have shifted by reducing the setup fees, and increasing the monthly costs. Monthly costs have gone up as well. Payroll has seen significant increases in Germany, construction has exploded far beyond inflation and, most importantly, electricity prices are still ridiculous due to merit-order and the refusal of splitting up Germany into multiple power pricing regions.
    - benjiro29 4mo ago
      I remember the price increase that Hetzner did during 2022 because of the invasion in Ukraine. The said they will adjust the prices down when the electricity price reduced. Guess what? I am paying as a consumer about the same price as before 2022. Did Hetzner change their price down? Remember, the industrial price also dropped (and they also build out a large solar plant). No ... Ok, inflation? But those price increases already covered part of that... Just saying, its not been the first price increase that happened. There have been multiple ones that Hetzner did over the years. Some flew under people radars. > Payroll has seen significant increases in Germany, Yea, we have seen nothing of that increase... O, wait, they reduce our income because the social security increase their costs. Yay ..
- MagicMoonlight 4mo ago
  [dead]
- thisisit 4mo ago
  Its not only RAM. I have seen people who are vibe coding their app and instead of choosing Vercel as default they are learning about dedicated server hosting, docker etc and moving to providers like Hetzner. This is why whenever someone says - with AI everyone is going to write their own SaaS, I am always like - and what happens to hosting? Even Vercel might increase their costs if that comes to pass.
andix 4mo ago
They might have had delivery contracts from before the prices increased, so they didn't have to pass them to customers. Maybe the last servers from those contracts got delivered already and any new orders need to be bought at much higher prices. Another possibility: They were growing too fast and need to slow down. At some point additional growth might become too risky, or even exponentially more expensive. It might require fundamental organizational changes.
- amoshebb 4mo ago
  I’m not a business person, but they’re already at the “hundreds of thousands of servers” scale, what about the 41st data center be organizationally far more expensive than the first 40?
  - andix 4mo ago
    Simple example: Pizza delivery service. The company runs very well, customers are happy, demand increases. At some point the demand gets so high, that they need to buy a second car for deliveries and a second pizza oven. They look at the numbers and see the risk of making less profit than before, if they expand. Especially if demand decreases at some point, instead of growing further. So they decide to just raise the prices, lower demand and make even more money without additional risk.
    - rendaw 4mo ago
      GP's point is this isn't the 2nd car, this is the 41st car. If they had 1 car it'd be a 2x increase. If they have 40 cars, the only way the 41st car would lead to a 2x increase is if that single car cost as much as 40 other cars. That's what the post you're responding to was asking.
      - AnthonyMouse 4mo ago
        The real question is whether it's actually just the 41st car or if the demand is such that they'd have to go from 40 cars to 200 and then risk having the demand fall back off after they've already sign on to making 160 more car payments.
Shank 4mo ago
> Have no clue what's going on in the back Hetzner and OVH and other bare metal but low cost providers use commodity hardware. When that commodity hardware increases there is simply no other option. The secret to the success of these providers is using common off-the-shelf hardware instead of specialized server hardware, which is now being cannibalized.
- bourbonproof 4mo ago
  doesn't this imply that they buy massive hardware and thus replace their hardware constantly? At what rate? It seems the rate is massive. I'd gladly use a 4year old server for the old price.
  - mpyne 4mo ago
    > thus replace their hardware constantly? Yes? How else do you think it works? At scale, hardware breaks all the time and must therefore be replaced all the time. This is true even at Hetzner's scale.
    - AnthonyMouse 4mo ago
      It's not even the reliability which is the issue. Newer servers can put hundreds of cores in one physical machine, while taking up the same amount of rack space and using the same amount of electricity as older systems with tens of cores. How long do you want to run something that uses 3x the electricity for the same level of performance when you're buying power by the megawatt? How about the even older ones that use 10x as much?
      - mpyne 4mo ago
        Yes that's a thing too, but it's a question of cost and potential revenue. So if replacement hardware is really expensive then maybe you make the inefficient stuff hang out longer, as long as it's not broken and you have paying customers. But at some point hardware does break and if you're going to keep the datacenter open for business you'll need to address turnover of inventory on an ongoing basis, and if you haven't locked in long-term deals for hardware then you'll have to bear current market prices when you do that.
franciscop 4mo ago
They are luckily only applying this to: > The price adjustment applies to new orders and cloud instance rescales starting from 15 June 2026; 8 AM CEST. > For orders placed before 15 June 2026, but delivered after 15 June 2026, the previous prices will apply. I am surely/definitely happy that the price doesn't increase for me. If it increased for everyone, I'd expect a much smaller jump. Also I'm not sure how much flexibility they have to increase the price for everyone without notice, given that they are in EU.
urda 4mo ago
It's so bad I will be looking at moving off Hetzner at this point. 3x is too much.
mpweiher 4mo ago
ARM instances (CAX) are all consistently at 30%.
chadgpt3 4mo ago
It seems to be 2-tier pricing. You can pay 4x for guaranteed delivery... they may have excess capacity at some point (-LTD SKUs) and then you can pay 1.1x while stocks last.

drewg123 4mo ago

The AI bubble has increased the prices of nand and ram by a factor of 4, so a 3x increase seems reasonable. Companies that are not big enough to have long term contracts with ram/nand vendors have been hit really, really hard by this.

Aissen 4mo ago
It's a bit higher than 4 now.
- microtonal 4mo ago
  They probably also have to factor in the pricing trajectory to avoid changing their pricing too often.
- magicalhippo 4mo ago
  I almost pulled the trigger on a 2x64GB 6400MHz CL36 kit for about $650 last August. It's been insane since the spike happened, but went down somewhat last month. I just checked and it has gone up $1500 since then to $5000. So that's over 7.5x what it was when I (sadly) did not buy it. Totally not kicking myself for dragging my heels on that purchase... Cheapest 2x48GB kit I can find here now is $1500, yay. That's 5200MHz CL48 stuff.
WhereIsTheTruth 4mo ago
There is no AI bubble There is an engineered scarcity, billion dollar companies can't ramp up production? Murica is stuck depending on the good will of Korea and China for thinking rocks? le fucking mao
- duttish 4mo ago
  As I understand it ramping up a new fab takes a couple of years and several billion dollars. The last time they ramped up production prices had crashed back down by the the time the new fab was fully up and running, so this time they're betting that the scarcity will resolve itself like it did last time.
  - gmerc 4mo ago
    They are not ramping up.
    - mrweasel 4mo ago
      Because they think it may be a bubble. If it's not, no harm done to the hardware manufacturers, they just make more money per unit, but if it is a bubble, they don't want to be stranded with excess capacity.
      - dabinat 4mo ago
        There is potential harm if it’s not a bubble and their competitors scale and capture more of the market and they don’t. That’s why CXMT is a real wildcard - they could use this situation to become a big player.
        chadgpt3 4mo ago
        Or even if it is a bubble and we all develop brand loyalty to the competitors who scaled.
    - Sohcahtoa82 4mo ago
      I'm trying to understand the intent of your comment. The person you're replying to explained why they're not ramping up, and you replied "They are not ramping up", which seems awfully silly.
  - benjiro29 4mo ago
    They are scaling up, but most will only come online in end 2027-2028 time frame. And Memory, as in what we use in PCs is easier to manufacture then HBM memory. But all the money is in HBM ... So for every ~4GB of memory that you can produce in normal DDR5, you can only make 1GB of HBM. But you make multiple times the revenue. The demand for HBM memory is not going to go away. LLMs are memory bandwidth hungry, and we are going to see production going to AI. But also to "lower end" like B200's. That means, they are producing multiple times less memory (if we look for the normal market demand), but still need to produce more for the memory bandwidth hungry market. We are seeing more products entering the "prosumer/business" market that are also memory bandwidth hungry. This demand will not go away. It will actually increase as companies move to more localized workloads. There is is a issue with data privacy that a lot of companies legally deal with. The lacking ramp up is not a sign of them being scared of over production, its a realization that 3 companies hold the market in a strangle hold, and "slow" scale. If everybody plays friendly, they can milk this for years. China is a solution but China does not have the HBM production levels, and will take years to scale and put a dent in the market. And China is ... allocating a lot to domestic production of AI > HBM ... The reality is, that unless competition ( as in China ) does not start scaling beyond the expected levels, the big 3 have no reason to scale too fast. And money is not the issue ... have you seen their revenue (and net profit!! ) numbers. A few billions is peanuts for them at this point. They simply do not want to scale too fast because that means less milking ... Memory demand is not going to away. When people talk about the AI bubble popping, its more in terms of the stock market. The product is here and not going away.
benjiro29 4mo ago
These prices have absolute nothing to do anymore with memory prices. Do not forget that Hetzner already increased the setup fees by a factor of 4x before to compensate for the price. And also servers getting price increases. It seems they have shifted by reducing the setup fees, and increasing the monthly costs. As this generates more revenue. And its easy to prove this... AX42 ... Its 8700GE that has gone from 65 Euro to 225 Euro. With the setup fee now being 112 Euro instead of 225 Euro. It has 64GB memory, and 1TB storage. The storage even in todays market is 100 Euro. The memory is 644 Euro. Do the math ... Hetzner servers had a hardware payback periode of between 9 to 11 month if you took the market value. This calculation has always been very stable over the 20 years i used Hetzner. This new price, reduced the hardware payback periode to ~4 month. It seems to be that Hetzer is trying to use the memory price issues, as a excuse. The revenue of those same servers now increased to a insane level. More revenue with less hardware. The real issue is that a lot of companies are moving from US hosting to EU hosting because of the problems with the US. Hetzner sees this as the perfect time to cash in on Enterprise customers. They have been trying to replace the "cheap" normal consumers with enterprise. This trend has been going on for a while already. Every customer that now leaves, is a server they can rent out to business customers. If you want to see the same thing, look up what happened to Microsoft/Github Copilot where they turn around has been sudden and very strong, with a clear goal of moving everything to enterprise.
- mschuster91 4mo ago
  > It seems they have shifted by reducing the setup fees, and increasing the monthly costs. Monthly costs have gone up as well. Payroll has seen significant increases in Germany, construction has exploded far beyond inflation and, most importantly, electricity prices are still ridiculous due to merit-order and the refusal of splitting up Germany into multiple power pricing regions.
  - benjiro29 4mo ago
    I remember the price increase that Hetzner did during 2022 because of the invasion in Ukraine. The said they will adjust the prices down when the electricity price reduced. Guess what? I am paying as a consumer about the same price as before 2022. Did Hetzner change their price down? Remember, the industrial price also dropped (and they also build out a large solar plant). No ... Ok, inflation? But those price increases already covered part of that... Just saying, its not been the first price increase that happened. There have been multiple ones that Hetzner did over the years. Some flew under people radars. > Payroll has seen significant increases in Germany, Yea, we have seen nothing of that increase... O, wait, they reduce our income because the social security increase their costs. Yay ..
MagicMoonlight 4mo ago
[dead]
thisisit 4mo ago
Its not only RAM. I have seen people who are vibe coding their app and instead of choosing Vercel as default they are learning about dedicated server hosting, docker etc and moving to providers like Hetzner. This is why whenever someone says - with AI everyone is going to write their own SaaS, I am always like - and what happens to hosting? Even Vercel might increase their costs if that comes to pass.

andix 4mo ago

They might have had delivery contracts from before the prices increased, so they didn't have to pass them to customers. Maybe the last servers from those contracts got delivered already and any new orders need to be bought at much higher prices. Another possibility: They were growing too fast and need to slow down. At some point additional growth might become too risky, or even exponentially more expensive. It might require fundamental organizational changes.

amoshebb 4mo ago
I’m not a business person, but they’re already at the “hundreds of thousands of servers” scale, what about the 41st data center be organizationally far more expensive than the first 40?
- andix 4mo ago
  Simple example: Pizza delivery service. The company runs very well, customers are happy, demand increases. At some point the demand gets so high, that they need to buy a second car for deliveries and a second pizza oven. They look at the numbers and see the risk of making less profit than before, if they expand. Especially if demand decreases at some point, instead of growing further. So they decide to just raise the prices, lower demand and make even more money without additional risk.
  - rendaw 4mo ago
    GP's point is this isn't the 2nd car, this is the 41st car. If they had 1 car it'd be a 2x increase. If they have 40 cars, the only way the 41st car would lead to a 2x increase is if that single car cost as much as 40 other cars. That's what the post you're responding to was asking.
    - AnthonyMouse 4mo ago
      The real question is whether it's actually just the 41st car or if the demand is such that they'd have to go from 40 cars to 200 and then risk having the demand fall back off after they've already sign on to making 160 more car payments.

Shank 4mo ago

> Have no clue what's going on in the back Hetzner and OVH and other bare metal but low cost providers use commodity hardware. When that commodity hardware increases there is simply no other option. The secret to the success of these providers is using common off-the-shelf hardware instead of specialized server hardware, which is now being cannibalized.

bourbonproof 4mo ago
doesn't this imply that they buy massive hardware and thus replace their hardware constantly? At what rate? It seems the rate is massive. I'd gladly use a 4year old server for the old price.
- mpyne 4mo ago
  > thus replace their hardware constantly? Yes? How else do you think it works? At scale, hardware breaks all the time and must therefore be replaced all the time. This is true even at Hetzner's scale.
  - AnthonyMouse 4mo ago
    It's not even the reliability which is the issue. Newer servers can put hundreds of cores in one physical machine, while taking up the same amount of rack space and using the same amount of electricity as older systems with tens of cores. How long do you want to run something that uses 3x the electricity for the same level of performance when you're buying power by the megawatt? How about the even older ones that use 10x as much?
    - mpyne 4mo ago
      Yes that's a thing too, but it's a question of cost and potential revenue. So if replacement hardware is really expensive then maybe you make the inefficient stuff hang out longer, as long as it's not broken and you have paying customers. But at some point hardware does break and if you're going to keep the datacenter open for business you'll need to address turnover of inventory on an ongoing basis, and if you haven't locked in long-term deals for hardware then you'll have to bear current market prices when you do that.

franciscop 4mo ago

They are luckily only applying this to: > The price adjustment applies to new orders and cloud instance rescales starting from 15 June 2026; 8 AM CEST. > For orders placed before 15 June 2026, but delivered after 15 June 2026, the previous prices will apply. I am surely/definitely happy that the price doesn't increase for me. If it increased for everyone, I'd expect a much smaller jump. Also I'm not sure how much flexibility they have to increase the price for everyone without notice, given that they are in EU.

urda 4mo ago

It's so bad I will be looking at moving off Hetzner at this point. 3x is too much.

mpweiher 4mo ago

ARM instances (CAX) are all consistently at 30%.

chadgpt3 4mo ago

It seems to be 2-tier pricing. You can pay 4x for guaranteed delivery... they may have excess capacity at some point (-LTD SKUs) and then you can pay 1.1x while stocks last.