The post seems to indicate this is just for VPSs, which doesn't seem true, the email I just received from Hetzner mentions price increases for dedicated servers too.
The ones I'm affected by seemingly:
Product -> previous price -> New price as of 1 April 2026
EX42-NVMe (FSN1) -> € 49.65 -> € 51.13
AX41 (FSN1) -> € 49.73 -> € 51.22
AX41-NVMe (FSN1) -> € 49.73 -> € 51.18
Server Auction -> € 65.22 -> € 67.18
Still cheap compared to the performance + unmetered bandwidth, so I'm personally not super upset about it, my monthly bill in total goes up maybe 40-50 EUR in total, not that outrageous.
Seems it's because of increased cost of hardware, and they seemingly tried to avoid increasing the prices but they couldn't. From the email:
> The underlying causes of the increased costs are, among others, the exploding demand for AI-related computing power and for cloud services. In addition, raw material prices and production costs have also generally risen for manufacturers. The costs for RAM and SSDs especially have risen by a large amount. For example, the cost for DRAM memory has increased up to 500% since September 2025. And according to market researchers like TrendForce, this price trend will continue throughout the year.
> We have genuinely tried hard to optimize our costs and to prevent increasing our prices for as long as possible. But we can no longer compensate for the strain that it has placed on our operations. We want to continue to deliver quality products that meet both our standards and your expectations, so we must take this step.
I'm not particularly tied to Hetzner as an American using their Ashburn servers, so I figured maybe this price increase puts them a little closer to DigitalOcean's pricing. The pricing is still pretty heavily in Hetzner's favor though: the CCX23s that I use will be $39.99 USD after April 1, but the closest DO equivalent is $126 USD with a third of the disk space.
I would imagine we are going to see a DO price increase soon, given the crazy costs of RAM and now storage. Given the usual life cycle of server hardware, they will need to start preparing their increases for the next cycle.
> puts them a little closer to DigitalOcean's pricing
DigitalOcean has been losing out to hardware inflation for a long time. Most of their fleet is very old except maybe the very top tier and that's still old.
They're really overdue for a refresh but now the hardware is so expensive.
I also thought it was only going to impact fixed prices services such as VPS / Cloud etc. But I'm pretty pissed off to have just got an email about dedicated "server auction" products. We agreed a price by auction, and they are putting it up.. Grrr
> the cost for DRAM memory has increased up to 500% since September 2025
How to ruin the entire Internet, software engineering and personal servers just because some billionaire man children watched Star Trek 30 years ago.
They are coming for everyone, including those who promote this AI nonsense here and who will be disposed of first, because they are the least competent.
While I have written elsewhere[1] that I think AI is causing a bubble right now, AI is also the biggest technological change to the world since the Internet.
I'm a software engineer, and I don't write code anymore. I'm still coming to terms with that, grieving the loss of my old career and getting used to the new career which is more like a technical lead and product person than a computer programmer.
A significant part of this is probably just the hockey-stick growth in the price of memory we have seen in the past 6 months. Would be surprised if this wasn't impacting their bottom line for maintenance.
RAM increased the most, but also SSD and HDD prices increased significantly. And it seems there are also supply problems, so you can't even be sure if you get the components you want at higher prices.
Right, this is what they said in the customer notification email I got today:
“The underlying causes of the increased costs are, among others, the exploding demand for AI-related computing power and for cloud services. In addition, raw material prices and production costs have also generally risen for manufacturers. The costs for RAM and SSDs especially have risen by a large amount. For example, the cost for DRAM memory has increased up to 500% since September 2025. And according to market researchers like TrendForce, this price trend will continue throughout the year.”
There is another factor at play here: EU hosting providers that are not owned lock, stock & barrel are few and far between and Hetzner has a very nice sales representative in the White House.
Yeah, also Hetzner is smart enough to realize that a lot of people are moving to them who are "Buy EU"-driven and are less price sensitive (certainly the most valuable ones are). Hopefully they can take these higher prices and further invest into the platform.
Here's to hoping the IOU purchase orders for RAM and SSDs get cancelled... Though I think folks are hedging that this will happen and limiting new suppliers.
Count yourself lucky! I took a new job in another city just as the bubble hit and had a 3 hour round-trip commute for a year and a half due to that mess. We literally couldn't afford to sell our house because we were underwater on the mortgage. (Would have had to bring more money to the table than we had in savings.) And because of that we also missed a lot of great deals in the destination city as well and had to settle for a house in the suburbs that we weren't thrilled with but fit our budget.
I shouldn't complain too much, lots of people had it far worse. Millions lost their homes (and their downpayments) altogether and took over a decade to recover, if they ever did.
These changes are effective April 1st for existing and new customers. The price increase ratios are also different across product lines.
* Cloud (VMs): 38%
* Bare metal: 15%
* Memory add-on for bare metal: 575% (effective immediately)
It feels like memory add-on is intentionally set high to discourage customers from adding more memory.
AX102 (128 GB RAM) costs €124, AX162 (256 GB RAM) costs €244, but the 128 GB memory add-on alone costs €264. If we ignore the setup fee, it’s more cost-effective to provision additional servers instead of adding RAM to bare metal instances.
By the same time next year the prices likely gone down, although maybe not to the pre-increase, but surely much lower than currently. Putting it in my calendar to revisit this comment in a year :)
Before today, we used to be able to order an AX162-R for €207 and add 128 GB of RAM for €46. Starting today, the same calculator provides €207 for an AX162-R (*) and €264 for the 128 GB RAM add-on. Sadly, HN doesn't let me upload screenshots.
(*) The price change for AX162-R machines is effective starting April 1st.
What happens when an unstoppable force (building everything in Electron because hardware is cheap) meets an immovable object (oh no hardware is expensive now)?
Markets only "figure things out" in a petri dish economy where:
1) There are no barriers to entry for competitors (e.g. protectionist tariffs, equal access to capital for everyone)
2) There are perfect substitutes available, so transitioning to a competitor is seamless and free (e.g. no requirement to store data in Country X, no vendor lock-in, no security compliance)
3) The industry is not a "natural monopoly" when only a handful of vendors can operate due to capital investment and national/global distribution required (see power utilities, telecoms, petrochemicals)
4) Profitability attracts competitors (won't happen because of #3), but heavy competition prevents abnormal profits from accumulating to a single player (happens because of #1, #2 and #3)
When markets don't figure things out, as is the case around the world, you get a tangled mess of market failures, government intervention and lobbying to neuter proposed interventions.
We see that market is very irrational now and it can stay irrational for long enough to destroy everything we know in tech.
By the time market figures things out, you may no longer have services, and hardware that you use daily. When such amounts of stupid money are pumped into a single industry, even if all AI companies went out of business tomorrow, it's going to take years for things to go back to normal.
FWIW, I'm not advocating taxes, as I think that won't really do anything. I don't know what the solution is either.
Because this perfect version of capitalism you think exists, doesn't.
We live in a world with markets dominated by cartels of tech companies who don't play by the rules. Every other industry that impacts society in a negative way typically pays some sort of specialized tax to offset that, I don't know why these tech oligarchs shouldn't have too. It's wild how people just want to let them do whatever they want.
Everyone says we need to deregulate tech, and certain industries to get ahead of China.. Isn't it funny how their largely government controlled economy (to a degree) is annihilating the west on all fronts economically. We need far more regulation.
China will defeat the West solely because it regulates its billionaires, not the other way around like we have it in the West. And I hope so, the world is rooting for you China.
Reads a bit like the Paperclip Maximizer appearing way ahead of schedule? Implemented not as AI, but as emergent behavior in the ways of the financial class (that happens to be about AI, singularity and all that).
Like the purchase price + increased cost? The thing is that these parties are sitting on billions and billions of investor money, they don't care that hardware is 400x as expensive. Which companies like nvidia have capitalized on a few years ago, they were already able to price their hardware at a 400% markup compared to pre-crypto times, and shift their focus from consumer graphics chips to datacenter compute chips, causing their revenue to go up 6x (if my interpretation of [0] is correct)
More like China-factor to get us out of the mess. We wait for Huawei photonics gpus (end of this year), CXMT and YMTC ramping up production to flood the market or as Janet coined it overcapacity. You know China will undercut the price significantly.
Slinging doom and gloom on the internet seems like engagement-bait to me at this point. If the suppliers aren't increasing production, they clearly see something all these armchair doomers do not, I'm sure the prices will normalize back to "normal" levels sooner than people think.
AI bubble won't last forever when a lot of compute is burned at a loss just so people can generate AI videos of sharks driving cars for social media shorts. It will burst at some point, at which HW manufacturing will have to lower prices if they still want to have enough sales to stay in business, since most of their current sales boom comes from HW they haven't even made yet.
OpenAI can't keep losing investor money forever with nothing to show for, at some point the first domino will fall, then the rest of the industry will go too from investor panic.
I really don't think so. I feel like we're at a takeoff.
Senior engineers using AI coding are 10x more productive. My output has jumped dramatically. I'm a senior engineer and built six nines, active-active systems that moved billions of dollars a day. I am absolutely a beast with these models. I can replace an entire team just by myself. I'm literally shipping an entire week of features in half a day. I'm reviewing the code and planning the architecture - I am not dialing this in.
Video editors using video models can replace entire studio production departments. Writer-directors who know how to direct are essentially now Hollywood studios in their own right. I know a lot about this in particular because I've been making films as a hobby for 15+ years and work with a lot of industry professionals.
You'll see a lot of slop, but that's the same thing we got when we gave the masses cell phones with cameras attached to them. We still have plenty of amazing photographers in the world, and the means of creation are only getting cheaper/easier and the scope of creation for any individual is growing and growing and growing.
I really love that their notification email includes applicable price change for my specific servers.
The worst counter example of this was Mercedes sending me an email saying "the terms and conditions have been updated, please read them at this link". It linked to the 52 page document I was supposed to read through in its entirety and manually diff against previous! Good thing they started adding a change log in the emails after some customer push back.
My ISP sends me an SMS telling me there's work being done in my area. I have 3 different accounts with them in different citites. No idea which one they are talking about at any given time.
Been running a handful of dedicated boxes on Hetzner for about 5 years now. Even with the increase, the price/performance ratio is still way better than anything comparable from the big three US clouds. Their AX-series auction servers especially.
What concerns me more than the price hike itself is the trend. Memory prices spiking, hard drives selling out, and now this. If you're running anything with serious storage or RAM needs, it's worth locking in what you can now. I grabbed an extra auction server last month just because the specs were good and I figured prices were only going up.
For anyone panicking about alternatives: OVH and Netcup are decent in Europe but have their own tradeoffs. OVH's network has been flaky for me, and Netcup's support is basically nonexistent. Hetzner's support has been solid every time I've needed it, which is worth something.
I just bought a Raspberry Pi 4 1 GB memory with aluminum case, aluminum NVME adapter, and a 64 GB SSD for about 80 euros. With microsd it’s even cheaper. 4 GB RAM would be about 120 euros.
The 1 GB RAM replaces one Forgejo runner that was in Hetzner. With €5 per month, I will earn this investment back in less than two years. After the price increase, this period will only shorten!
As a customer, I am OK with most increases but not the object storage one. This one has some quality issues and is no longer competitive in price either. I'm thinking of moving S3 part to OVH.
I would expect a large provider like Hetzner to refresh hardware continuously - every year a fraction of old hardware is retired and replaced by new. Given price shock they could stop doing this but older hardware is less energy efficient and has limited life anyway.
Hetzner mostly ate up the rising energy prices in germany for the last 3 years and they have big problems with their hardware supply since then. It is hard to get cloud instances in nbg and fsn. So an increase in pricing is very much expected from my side.
German electricity prices have been falling for the last 3 years. They've been below the pre-war levels for a while now.
Hardware prices, especially with the current chaos, and the huge spike in demand they've doubtless seen is more than enough to explain this price hike though.
In their email they say their operating costs increased too. Whether it actually did or not, that is their reasoning to increase prices on already sold products.
A PUE of 1.00 means all of your electricity is used for compute and none for cooling (and other things). "as much electricity for cooling as you spend of compute" would be a PUE of 2. It's "total / compute". And PUE of 2 would be quite bad, most facilities are better than 2.
I just started the process of migrating to them yesterday. They are still very affordable. But a bit less. I'm estimating that our quite lean GCP setup cost is going to be cut to about 20-25% when I'm done. So, it doesn't affect my decision to go with them literally yesterday morning.
It's all a bit barebones and primitive but I don't mind. I spent yesterday tweaking some ansible scripts with codex to setup stuff like bastion hosts and nat networking. I expect I have most of the rest ready in a few days.
The benefits of having an uncomplicated docker compose and boring tech stack. No microservices. Just a monolith.
One issue that I don't have a solution for yet is disk encryption and encrypted bucket content. Probably solvable but not natively supported. Might trigger compliance issues with some of our customers.
I always found that compliance issue with encrypted drives a bit funny.
The provider has the keys.
So, the drives encryption has no practical application.
The drives in, say, GCP aren't even real drives, the blocks are chunked over a distributed pool of storage- you can't just grab a drive and walk away with an OS or a data volume, you'd just get random junk. - So what's the encryption going to do?
I guess it's harder to attach your drive to someone elses VM, but ultimately since the provider has the key it doesn't actually change anything there either, except that you need another API call to launch a drive and maybe there's different permissions on your drives key than on the drive itself?
idk, feels like a weird theatre that the providers get away with because they're so big; there's no practical way of even checking if they're following up with drive encryption either. So it really is "here you can input a secret key, that you choose, we promise to use it *wink*".
Totally absent any verifiable outcome, or actual threat model.
You're one of those that's going to laugh at the idea of "verifiable cloud" that Apple and others are pushing? How dare you stand in the way of AI everywhere!
There's no mention of RAM upgrades. If we bought RAM already at the old prices, are they being increased as well? The current pricing for RAM has more than quadrupled since January.
Hi there, To the best of my knowledge, anyone with *existing* RAM *add-ons* that were affected by price changes should have received a separate email. Please carefully check your email inbox/trash/spam.
The general price changes we announced today will affect both new and existing products, like dedicated servers and cloud servers: https://docs.hetzner.com/general/infrastructure-and-availabi... Those prices will take effect on 1 April 2026. --Katie
Hetzner is currently cheaper than getting a static IP from my ISP + electricity, but just barely. I have a ton of local compute and can easily allocate one or two servers to take over if sufficiently motivated.
I wonder how many of Hetzner's customers are like me. I hope DRAM doesn't kill off cheap VPS providers like this one.
Your ISP will cut your account when you saturate the upstream pipe 24/7 for weeks on end... which will only happen if you host video.
And your home insurance will not know/care if you're operating a desktop-sized computer or even a single server (it is perfectly fine and expected a developer might bring an actual server home for troubleshooting). Home insurance only cares if you're running dozens of them.
Same, still 5€/month for my (now discontinued, apparently) VLE-2 box. Current VPS line-up (Intel based, though) is still quite cheap: https://www.ovhcloud.com/fr/vps/
Used to have my VPS' with OVH a few years back but noticed the performance was significantly worse than similarly priced Hetzner ones. Not sure if that changed.
Regarding alternative VPS providers, Infomaniak in Switzerland have decent prices on their Lite range [0]. I'll stick with Hetzner but if I move some day, I might try them out.
I checked yesterday. The cheapest vm I can get from them was something like 25 euros/month. The one I get from Hetzner was 6/month and now will be 8 per month. That's a 3x difference. A little cheaper than GCP/AWS. But not a whole lot. I went with Hetzner based on that as I'm trying to reduce an 800 euro/month Elastic Cloud + GCP bill to < 100 month. Even with the price increases, I should get below 100/month.
I've been on OVH forever, but recently switched to Hetzner as OVH doesn't have their equivalent of their auction servers which are great if you are looking for combinations of SSD + HDD servers. These don't really exist at OVH unless you pay > 200 euro / month.
On one hand this is not good but predictable. I'm on longer-term commitments with OVH, so it will be interesting to see how they follow. I'm still keeping Hetzner on my shopping list, even with the increase the bare-metal offerings are within my budget, and now that prices have increases they should be stable for a while (also import for budget management).
Doesn't seem to apply to older/deprecated gen instances. I've got a CX22 there for personal screw-around projects and it's the same £3.95/mo (pre-VAT) afaict. So maybe not much help to folks ordering new or running on the current gen as the older kit isn't something you can order now, but a small boon for us laggards.
Western memory manufacturers decided to chase the AI bubble, abandoning the consumer and low-requirement markets entirely.
Chinese manufacturers are now capturing that entire segment with full vertical integration. When this bubble stabilizes, because it will (it's not going to grow to infinite), Western companies won't recapture those markets.
They've already ceded competitive advantage for the next decade. This is a structural shift, not a cyclical shortage.
It's another step in the transformation of Western industry that began in the '80s: the shift from real economy and human-centric production to financialized operations.
You're speaking like Hetzner is raising prices to fund Nvidia-laden datacenters, while in fact they're mostly providing cheap servers and their growth is mostly happening because of US admin's insanity.
Memory is going up for everyone, dude. And the people moving to Hetzner aren't exiting US clouds to leave for chinese ones.
Something I don't quite understand is why the price of a used dedicated server is impacted by anything beyond electricity and land prices. It's not like the RAM gets replaced by new one every now and then. That's old RAM chip that's been bought years ago (and I believe largely amortized by now).
Is there any collocation space from which you can actually buy and own a physical machine without going there, and pay only the rent and traffic? I miss calling a server "mine".
You're not paying for the used server; youre paying for the used server and the replacement; thats how you can grow a business without assuming huge capex investments upfront.
I think its still common for colo spaces to have installation services for shipped-in hardware. You buy a server, configure it and ship it to the DC.
Hardware market has become very unpredictable, I have had vendors rejecting my replacement orders because new orders where 20% more expensive 15 days after I initially ordered the DRAM.
Wow. That sucks. hcloud was great for ages and highly competitively priced.
Vultr may be a good alternative. If you want to search VPS prices across the 6 major clouds (gcloud, aws-cli, hcloud, az, doctl, and vultr-cli) I made a wrapper TUI that lets you search, sort, and rent VPS.
I feel like a huge selling point of Hetzner is that they're based in Europe, and they're themselves citing that as the reason for a huge uptick in sales and new users. In that context, I don't Vultr is a realistic alternative.
This is it. Hetzner has always been very price competitive in its existence. Given the private ownership, I din‘t expect this to be a sudden outburst of greed, but to actually reflect rising costs.
If a provider has higher margins, they may choose to eat some of the cost. But I would not expect that to be the case across the board
I have been buying older servers by the truckloads. Older being a year or so. It will be enough to host whatever outside AI that we need for the coming 15-20 years. And the all were great deals, will have them paid for within a month per server. I have my own cage full with empty racks bought from a bankrupt company in AMS.
We run production on servers 15 years old for our company/clients. Servers now are far faster and the software barely changes performance characteristic wise. We run Java, Perl & PHP ERP/departmental type projects; nothing that gets added makes anything slower and I don't see that happening either. Unless clients will want vastly different things, which, you know, they won't as they are big sluggish companies.
Curious about the specs of servers that you are buying.
We are looking for some non-GPU HPC servers, but there's always the question of whether second-hand servers will be good-enough/power-efficient for our use case.
I understand that the market for hardware is insane right now, so it’s logical for prices to increase. But in a few years, when hardware prices are hopefully at a more reasonable level, will these providers reduce prices again or will we be eating these costs forever?
You might be right. Sorry. I should have said they haven't increased prices for existing dedicated servers since my direct experince is only there. Actually until about 3-4 years ago when the whole world went to shit, using a server for a year or two then upgrading to a better server for cheaper, was the norm. In that environment, you would naturally not have price increases.
Market for DDR4 is crazy, but not as crazy as DDR5.
Also a symptom of how inelastic hardware demands are. You would expect the purest k8s people to just shove workers on older machines and completely dodge this crisis, but we don't see that at all. Despite being an almost-commodity, many of the hw vendors still have a decent hand.
Hm the pricing increase stresses me out out less than the server shortages. My impulse reaction is to buy a few cheap cloud VPS instances even though I don't need them right now... Anyone have any wisdom to encourage/discourage this?
They are solid and cheaper, but they don't offer the same level of control plane and API access as Hetzner that is really helpful when managing a larger number of servers.
This is probably the best alternative provider for individuals that I could find, unless you're orchestrating a fleet of servers or something. Personally I'll wait out my next billing cycle with hetzner, as I expect other hosts to follow shortly.
> Now that people don't care about Anti DDoS - this happens.
Could I prod why that is? I'm dealing with a ovh server and using their anti-ddos detection for an issue currently so this topic I'd like to learn about.
I haven't received this email, and I have one x64 server that costs around 4 EUR/mo, and an ARM server that costs about 6 EUR/mo. I wonder if I'll still be affected by the price increase.
I almost didn't see their email because it's sent by "notification" (notification@hetzner.com, no name set). Title is "Update on our pricing".
Anyway my increase is:
EX44 (HEL1) € 44.76 -> € 50.76
Not pleased especially as the reason for the increase for existing customers is a nebulous "The costs to operate our infrastructure has increased dramatically."
This will be as a shockwave in web hosting industry, the same as it was with electricity price. There is nowhere to run. Everyone will increase their prices, unless hardware crysis ends up.
My CCX13 (dedicated cores) went from 15€ to 20€ now. Looking at Netcup as alternative, more cores and more RAM for 12€ - anybody has experience with their root (kvm'ed) servers?
well personally I do not expect support for a 12€/month product. Given cost of labour in germany/europe, just talking to a person for 10-20minutes destroys their profit margin for years. I DO expect uninterrupted service, though.
This is likely just the first wave. If this component hoarding by AI continues, and it likely will, at some point, it will be just OpenAI and Anthropic who can afford to have compute.
This has affected SSDs first, then RAM, then HDD and it doesn't look like even HDD manufacturers are going to increase production. So unless groups of people suddenly learn how to manufacture all of this hardware and open factories quickly, it's going to be a very fun next few years.
People have been predicting SaaS will die for all the wrong reasons. It's not that anyone can ship a SaaS clone by prompting an AI, it's that nobody is going to have access to the hardware required.
This mirrors the increased costs of people who already space + power in a DC, and want to buy new machines to fill their racks. Everybody is being hit.
If we end up with metric tons of unused HBM memory lying around, I'm sure that someone will design a general purpose computer using them, or design a HBM-to-DDR interface.
If you delay your iPhone upgrade because of RAM prices, you're not going to buy two at once because you were delayed. So push, forward, push forward, sure, but to a point.
companies that haven't turned a profit are outbidding the rest of the economy for hardware. that's not a supply shortage, it's a subsidy funded by venture capital.
Would have to be quite a few years - last time price bump was in 2022 by 10% due to increase in energy costs because of the war in Ukraine. Naturally prices didn't go down.
> There have been drastic price increases in various areas in the IT branch recently. That is why, unfortunately, we must also increase the prices of our products.
> The costs to operate our infrastructure and to buy new hardware have both increased dramatically. Therefore, our price changes will affect both existing products and new orders and will take effect starting on 1 April 2026.
> We have genuinely tried hard to optimize our costs and to prevent increasing our prices for as long as possible. But we can no longer compensate for the strain that it has placed on our operations. We want to continue to deliver quality products that meet both our standards and your expectations, so we must take this step.
Knock-down effects from the RAM shortage, starting to see CPUs shortage (lead times for Intel at 6 months for server-class CPUs, AMD also notified enterprise customers about a crunch), GPUs shortage, storage prices are increasing a lot as well.
Everything is much more expensive on the hardware-side at this moment, I think we will see these price increases across any provider that requires hardware, I'm just waiting until Backblaze notifies they will also need to increase pricing due to this.
AI is sucking money from everything, not only financial markets, it includes all of us consumers of anything that requires hardware to run on.
Hopefully this craze dies down in the next 1-2 years because it will be untenable to be paying 2-3x prices for the same technology we had for quite cheap just a year ago...
> For example, the cost for DRAM memory has increased up to 500% since September 2025.
That is an utterly insane price hike. Is production being scaled up, and will that take years? Or are producers happy charging 5x the price for the same amount of effort?
How much of this is driven by speculation vs actual demand?
I tried to sign-up with Hetzner instance last night - after all the signup etc, it expects me to enter my passport information for "verification". Fuck that.
This excuse "we need to raise prices because we have more demand" is BS. They should be truthful and say "we can increase prices and people will pay it because they want to be EU based"
To be honest for anything more serious than a personal Minecraft server hetzner has been beaten by ovh for ages (on bandwidth - you get all you can eat data limited by speed from ovh - for example 500mbit, instead of 20tb from hetzner).
For this reason hetzner is always a "backup DC" in my eyes and never the primary.
Also I heard they are extremely sensitive regarding abuse allegations so don't even think of hosting something someone may not like seeing...
They get a lot of hype, but there are many competitors worth looking at.
It is, but more customers at a time of historically high component prices will do it. If you set your costs assuming every user's hardware is $1, and your customer base doubles when the hardware is $2, you're going to have to raise prices for everybody
The next set of hardware purchases will cost more than their last set of hardware purchases, and that's going to outweigh any labour economies of scale given just how many hardware components are in shortage this year.
If their growth had been in their projections in say 2024, they might have just been able to skip a round of hardware purchases, but the combination of growth meaning they must expand their hardware and hardware costs made this inevitable.
Can anybody predict this craze? The classical memory manufacturers are not yet adding additional manufacturing capacity. They learned this hard way in the past. That means, the demand is here to stay for years without typical bubble burst. Is this a point where Chinese companies will rise worldwide?
The massive DC overbuild matches demand, prices normalise somewhat in 3-5 years.
The massive DC overbuild does not match demand, prices tank in 3-5 years.
Third possibility: some approach like Taalas renders the current storyline meaningless. Would put 3 in 10 odds of this happening but I'd looove to see it.
Fourth: entire planet gets profoundly sick of emdashes, we all move back into caves and live in eternal gratitude of the moment humanity woke up to how little all of this really matters.
Hard to predict. If the bubble pops (NVIDIA and "circular economy", massive FAANG datacenter expansion plans, huge LLM training budgets) the markets will once again be flooded with components.
But, the shortages may very well continue into 2027, leading to some manufacturers going out of business and yet another massive redistribution of wealth.
Running a small project on Hetzner from Germany. Got the email this morning. Honestly, even after the increase their dedicated boxes are still absurdly cheap compared to what you'd pay at AWS or GCP for equivalent specs.
The real story here isn't Hetzner being greedy. It's that AI companies are vacuuming up every DRAM chip on the planet and the rest of us get to pay the tax. I priced out a RAM upgrade for my home server last week. Same kit I bought 8 months ago for 90 EUR is now 400+. That's not normal market dynamics.
What worries me more is the second-order effects. Startups that would normally spin up cheap VPS instances to prototype and iterate now face meaningfully higher costs at the exact stage where every euro matters. The "just deploy it" culture that made European indie dev scene so productive was built on sub-10 EUR/month boxes. Those days might be over for a while.
"The real story here isn't Hetzner being greedy. It's that AI companies are vacuuming up every DRAM chip on the planet and the rest of us get to pay the tax."
We might also have our aquifers depleted and our electricity prices skyrocket. But at least we see really great benefits, such as being able to script some side-project while unemployed due to AI.
> It's that AI companies are vacuuming up every DRAM chip on the planet and the rest of us get to pay the tax.
DRAM is priced based on supply and demand, like every other market.
When demand goes up, the price goes up for everyone. It’s not a “tax” on the rest of us in any sense. There’s just a lot of demand everywhere.
> That's not normal market dynamics.
This is actually a textbook example of markets functioning in response to a demand shock where supply cannot be increased rapidly.
I do find it interesting that so many people think “market rate” means the opposite of what economics teaches, and that prices should stay stable and not change much when the economic conditions change.
I also find it interesting to read all of the “we shouldn’t let them…” takes in response to this situation. The DRAM market is international. Trying to restrict it in one country would just see the data centers get built in another country.
> When demand goes up, the price goes up for everyone. It’s not a “tax” on the rest of us in any sense. There’s just a lot of demand everywhere.
> This is actually a textbook example of markets functioning in response to a demand shock where supply cannot be increased rapidly.
You act like it's a competitive market. It's not the case.
It's an oligopoly with an extremely inelastic supply side.
The market is already completely broken and ineffective due to concentration and export controls. The actual response to a major demand shock should be investments to increase capacities but it's currently extremely limited because suppliers want to protect their margins and fear the market contracting again.
> It’s not a “tax” on the rest of us in any sense. There’s just a lot of demand everywhere.
Curious on whether you will still hold your stance if OpenAI gets a taxpayer bailout. Even disregarding a bailout, they are already lobbying hard for tax credit expansion.
> This is actually a textbook example of markets functioning in response to a demand shock where supply cannot be increased rapidly.
The problem is that demand is being propped up by speculative capital. The AI companies are a bubble that is suffocating productive parts of the market with the hording of capital which they're now using to also hoard hardware. All this without making money for data centres that aren't build yet, for a handwavy promise that an AGI will magically solve all the worlds problems.
This is not normal, and it is not good for the broader economy.
> Trying to restrict it in one country would just see the data centers get built in another country.
I'm surprised this isn't already what's being done. Inference doesn't require super low latency with the client, and the population's support of AI (and especially data centers for it) is waning quickly. This feels like another ideal use case for outsourcing the stuff Americans don't want to see to somewhere that it'll be someone else's problem.
Can't agree more. We can also predict with some confidence that in a year or two, supply would have adjusted and ram will be cheaper in the long run. We benefit from the expanded demand even if the fact that it first lands as a shock is disruptive to prices.
The problem is that OpenAI has cornered the market. Maybe they haven't crossed the legal line or more to the point no one in this corrupt and incompetent administration is going to prosecute them, but buying up 40% of a market which hasn't got any additional capacity is cornering by any measure.
So yes, this is not a normal market. Your claim of a functioning market is the same as saying my laptop, having lit on fire, is a functioning computer after having 10,000 volts applied across it.
> DRAM is priced based on supply and demand, like every other market.
Please don't explain it away like that - you are referring to the theoretical "ideal" market where a bunch of small companies compete with low margins to the benefit of the wider customer base. This is not what is happening. We have a couple of intrinsically worthless, LLM-whale companies, working literally to swallow and entshittify literally everything in their weird transhumanist/accelerationist/weirdo way. To add to the insult, the whole creation of artificial scarcity is almost a political construct, paid for with "monopoly-the-game-money" that these companies DO NOT EARN but instead BORROW based on vague and dishonest promises of achieving a "Country of PhDs in a datacenter"/"Pocket PhDs"/"AGI by 2025" (oops, now apparently by 2028 according to the OpenAI CEO). In their weird vision, as humans we should be merely cattle to be managed, not independent spirits with interest and aspirations. That ghoul Karpathy speaks about "ghost in the machine", overlooking the magnificence of the already existing "ghost in the machine" in the form of human beings. We should not have to swallow the increasingly crappier future these folks are insisting on pushing on all of us.
But aren't those the same startups that think they need to run on AWS EKS instead of using a single cheap server? The cheapest used Hetzner server currently is €39.24 / month:
Similar to my favourite OVH servers, but I have unlimited traffic at 0.5Gb/s 64gb ram and dual mics. Similar price (with vat in Poland).
If you wanted to run same workloads on Aws it would cost you few hundred euro a month.
I see a silver lining to all this. At least maybe the silly "throw more horizontal scaling at it" will stop being a default response to all performance problems and people that are able to squeeze more processing out of the same hardware will be sought after again.
If your only need is a lot of bandwidth with very low server CPU use that’s fine.
That CPU is ancient, though. Over a decade old. That DRAM is 2-channel DDR3.
This could be a good deal for someone, but entrusting your startup’s operations to a 10 year old slow computer in Germany instead of using EKS would be an extremely short sighted move. A startup should be developing software and shipping it quickly to validate the market, not pinching pennies to save the equivalent of a couple hours of developer salary.
Excuse me, but if the difference between 10 EUR per month and 14 eur per month is going to kill your startup, you probably shouldn't try to start it.
Might be time to think about using and creating less memory-hungry software.
Actually I disagree. I've killed projects because I've run out of time for them and didn't like them costing me £50 a month. If I'd been able to keep them going at £10 a month, I might have kept them going until I could get back to them. Sometimes startups fail just because the owners get distracted by life, and the project just needs more time.
2) why could they not just up the prices for new deployments, like they did with their dedicated servers? I think that would be fairer to existing customers
If you have a company, I can recommend leaseweb for cheap hosting. I host my personal stuff like my email and my ente.io instance there. They are cheaper than Hetzner (already before the new price increase) if you don't need managed k8s.
When I have looked on Newegg and on Amazon USA last month, I have seen even greater prices than here in Europe, by 30% to 40% greater, which is reversed from previous years, when computers and computer-related components were cheaper in USA than in Europe.
So I think that the victims are all the computer users of the entire world, with the exception of a negligible number of humans tied to the AI companies. Moreover, the US victims appear to be hit by the price hikes even more than in other countries, at least for now.
BuyFromEU is the funniest subreddit there is right now. Unintentionally but still entertaining. EU has managed to paint itself into unenviable corner. I can't buy from EU even thought I want to because for physical goods - cross country shipping costs are prohibitive and for digital - they are either subpar, more expensive or both.
Try this as experiment - try to buy something like precision dowel pins from Poland or DOLD Mechatronik with shipping to Greece, Bulgaria or Romania vs the same thing from Aliexpress or Temu. Chinese costs are cheaper even if they have to fly here.
Not to mention that from July 1, 2026, the EU is abolishing the €150 duty-free threshold for non-EU shipments. This is specifically targeted at the flood of packages from marketplaces like Temu and Shein.
From July there will be a flat customs duty of €3 for small consignments. This fee applies per category. If your package contains items from different product groups (e.g., a shirt and a cable), you might pay the fee multiple times.
The Goal: To create fair competition for European retailers who can't compete with subsidized shipping and tax loopholes from massive non-EU sellers.
This will obviously have a knock-on effect for larger shipped items which are presumably subsidised at the bottom line by these parcels of fast-fashion and eWaste.
As someone that frequently buys low-cost second hand electronics from Japan, I am a little frustrated about the €3 per-category customs duty. That means a €80 package of various old game cartridges, retro handhelds, digital watches and collectables will now have another €12 to €24 on top of the 21% VAT and €6 handling fee. For an €80 package I am now looking at €15 for shipping and €34 to €46 in import cost. That kills a fun hobby.
>Try this as experiment - try to buy something like precision dowel pins from Poland or DOLD Mechatronik with shipping to Greece, Bulgaria or Romania vs the same thing from Aliexpress or Temu. Chinese costs are cheaper even if they have to fly here.
This is an awful experiment. Only consumers care about delivery costs on deliveries like these, and what you're looking at are explicitly not goods aimed at consumers.
Okay. Then buy pizza oven from Italy and see how shipping costs are 60% of the price of the oven.
Anyway - you seems to misunderstand. If transporting something from Shenzhen to Franfurt is cheaper than transporting the same thing from Krakow to Thessaloniki - means that EU has fucked up royally in its main mission - to facilitate movement of goods. WE have ungodly patch of local carriers and courier companies and a lot of friction in every kind of intra eu goods movement.
The reverse is true too. The shipping costs from US -> EU are prohibitively high, oftentimes making ordering stuff from the US a no go. I think only Amazon (for certain products at least) charges somewhat reasonable shipping costs.
The post seems to indicate this is just for VPSs, which doesn't seem true, the email I just received from Hetzner mentions price increases for dedicated servers too.
The ones I'm affected by seemingly:
Still cheap compared to the performance + unmetered bandwidth, so I'm personally not super upset about it, my monthly bill in total goes up maybe 40-50 EUR in total, not that outrageous.
Here is the full list of the updated prices: https://docs.hetzner.com/general/infrastructure-and-availabi...
Seems it's because of increased cost of hardware, and they seemingly tried to avoid increasing the prices but they couldn't. From the email:
> The underlying causes of the increased costs are, among others, the exploding demand for AI-related computing power and for cloud services. In addition, raw material prices and production costs have also generally risen for manufacturers. The costs for RAM and SSDs especially have risen by a large amount. For example, the cost for DRAM memory has increased up to 500% since September 2025. And according to market researchers like TrendForce, this price trend will continue throughout the year.
> We have genuinely tried hard to optimize our costs and to prevent increasing our prices for as long as possible. But we can no longer compensate for the strain that it has placed on our operations. We want to continue to deliver quality products that meet both our standards and your expectations, so we must take this step.
I'm not particularly tied to Hetzner as an American using their Ashburn servers, so I figured maybe this price increase puts them a little closer to DigitalOcean's pricing. The pricing is still pretty heavily in Hetzner's favor though: the CCX23s that I use will be $39.99 USD after April 1, but the closest DO equivalent is $126 USD with a third of the disk space.
I would imagine we are going to see a DO price increase soon, given the crazy costs of RAM and now storage. Given the usual life cycle of server hardware, they will need to start preparing their increases for the next cycle.
> puts them a little closer to DigitalOcean's pricing
DigitalOcean has been losing out to hardware inflation for a long time. Most of their fleet is very old except maybe the very top tier and that's still old.
They're really overdue for a refresh but now the hardware is so expensive.
It does list the dedicated servers price increase:
https://docs.hetzner.com/general/infrastructure-and-availabi...
Yes, my dedicated server is going up by 3% this year. That doesn't seem bad at all. It's still cheap!
Same. This price increases is making me think about switching all the workload that I have on Hetzner Cloud into dedicated auctions server.
The price increases for dedicated servers are reflected in the higher setup costs. For example, I believe AX102 setup was EUR 39.00 now EUR 269.00.
I also thought it was only going to impact fixed prices services such as VPS / Cloud etc. But I'm pretty pissed off to have just got an email about dedicated "server auction" products. We agreed a price by auction, and they are putting it up.. Grrr
> the cost for DRAM memory has increased up to 500% since September 2025
How to ruin the entire Internet, software engineering and personal servers just because some billionaire man children watched Star Trek 30 years ago.
They are coming for everyone, including those who promote this AI nonsense here and who will be disposed of first, because they are the least competent.
While I have written elsewhere[1] that I think AI is causing a bubble right now, AI is also the biggest technological change to the world since the Internet.
I'm a software engineer, and I don't write code anymore. I'm still coming to terms with that, grieving the loss of my old career and getting used to the new career which is more like a technical lead and product person than a computer programmer.
[1] https://news.ycombinator.com/item?id=47037421
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A significant part of this is probably just the hockey-stick growth in the price of memory we have seen in the past 6 months. Would be surprised if this wasn't impacting their bottom line for maintenance.
RAM increased the most, but also SSD and HDD prices increased significantly. And it seems there are also supply problems, so you can't even be sure if you get the components you want at higher prices.
Right, this is what they said in the customer notification email I got today:
“The underlying causes of the increased costs are, among others, the exploding demand for AI-related computing power and for cloud services. In addition, raw material prices and production costs have also generally risen for manufacturers. The costs for RAM and SSDs especially have risen by a large amount. For example, the cost for DRAM memory has increased up to 500% since September 2025. And according to market researchers like TrendForce, this price trend will continue throughout the year.”
There is another factor at play here: EU hosting providers that are not owned lock, stock & barrel are few and far between and Hetzner has a very nice sales representative in the White House.
Can you expound on that? I'm not sure I get what you're implying.
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Yeah, also Hetzner is smart enough to realize that a lot of people are moving to them who are "Buy EU"-driven and are less price sensitive (certainly the most valuable ones are). Hopefully they can take these higher prices and further invest into the platform.
The strongest reaction of EU would be to subsidize RIPE small LIR fees to 0€ and embrace decentralization.
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Here's to hoping the IOU purchase orders for RAM and SSDs get cancelled... Though I think folks are hedging that this will happen and limiting new suppliers.
I kinda miss the days of the crazy housing bubble back in late 2000s, at least that bubble didn't affect my daily life.
Count yourself lucky! I took a new job in another city just as the bubble hit and had a 3 hour round-trip commute for a year and a half due to that mess. We literally couldn't afford to sell our house because we were underwater on the mortgage. (Would have had to bring more money to the table than we had in savings.) And because of that we also missed a lot of great deals in the destination city as well and had to settle for a house in the suburbs that we weren't thrilled with but fit our budget.
I shouldn't complain too much, lots of people had it far worse. Millions lost their homes (and their downpayments) altogether and took over a decade to recover, if they ever did.
Is there also an increase in non-US hosting demand?
These changes are effective April 1st for existing and new customers. The price increase ratios are also different across product lines.
* Cloud (VMs): 38%
* Bare metal: 15%
* Memory add-on for bare metal: 575% (effective immediately)
It feels like memory add-on is intentionally set high to discourage customers from adding more memory.
AX102 (128 GB RAM) costs €124, AX162 (256 GB RAM) costs €244, but the 128 GB memory add-on alone costs €264. If we ignore the setup fee, it’s more cost-effective to provision additional servers instead of adding RAM to bare metal instances.
Here's the link to cloud and bare metal pricing changes: https://docs.hetzner.com/general/infrastructure-and-availabi...
> * Memory add-on for bare metal: 575% (effective immediately)
> It feels like memory add-on is intentionally set very high to discourage customers from adding more memory.
Memory prices are so stupid now that 575% is pretty close to their actual costs.
https://pcpartpicker.com/trends/price/memory/
DDR5-6000 2x32GB: ~$200 -> ~$1000
> * Memory add-on for bare metal: 575% (effective immediately)
> It feels like memory add-on is intentionally set high to discourage customers from adding more memory.
List price on Dell's website for servers is about $100/GB for RAM. Woof.
Have you seen the price of RAM recently?
AFAIK, it's been stabilizing lately at the current price, so at least it's not increasing anymore: https://pcpartpicker.com/trends/price/memory/
By the same time next year the prices likely gone down, although maybe not to the pre-increase, but surely much lower than currently. Putting it in my calendar to revisit this comment in a year :)
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> * Memory add-on for bare metal: 575% (effective immediately)
I don’t see this anywhere, source?
I used Hetzner's pricing calculator.
https://www.hetzner.com/dedicated-rootserver/ax162-r/configu...
Before today, we used to be able to order an AX162-R for €207 and add 128 GB of RAM for €46. Starting today, the same calculator provides €207 for an AX162-R (*) and €264 for the 128 GB RAM add-on. Sadly, HN doesn't let me upload screenshots.
(*) The price change for AX162-R machines is effective starting April 1st.
Yeah, not sure where they're getting those from.
From the Robot UI, I tried ordering a new EX44 or EX63:
- EX63 comes with 64 GB DDR5 by default, can be upgraded to 192 GB DDR5 ECC for added €42.35
- EX44 comes with 64 GB by default, can be upgraded to 128 GB DDR4 Non-ECC for added € 16.94 max. per month
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It seems we will run out of hardware by March?
"Hard drives already sold out for this year" - https://www.theregister.com/2026/02/20/ai_blamed_again_as_ha...
Time for an AI tax on the hyperscalers.
> It seems we will run out of hardware by March?
What happens when an unstoppable force (building everything in Electron because hardware is cheap) meets an immovable object (oh no hardware is expensive now)?
We go back to the demoscene days, being creative with what we have instead of shipping Electron junk.
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Maybe we need to let go of our auto-scaled 100 pod service mesh for a todo list app, and just deploy it bare metal on 2 servers.
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I guess we have to get creative again.
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consumer RAM is not what's creating shortage. Data centers doesn't run electron to train the model or for inference
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Stop using Electron to save massive amounts of RAM.
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Everything gets more expensive?
2026 will be the year of Rust...
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Why tax something that the market will figure out? This is normal and things will sort themself out.
Markets only "figure things out" in a petri dish economy where:
1) There are no barriers to entry for competitors (e.g. protectionist tariffs, equal access to capital for everyone)
2) There are perfect substitutes available, so transitioning to a competitor is seamless and free (e.g. no requirement to store data in Country X, no vendor lock-in, no security compliance)
3) The industry is not a "natural monopoly" when only a handful of vendors can operate due to capital investment and national/global distribution required (see power utilities, telecoms, petrochemicals)
4) Profitability attracts competitors (won't happen because of #3), but heavy competition prevents abnormal profits from accumulating to a single player (happens because of #1, #2 and #3)
When markets don't figure things out, as is the case around the world, you get a tangled mess of market failures, government intervention and lobbying to neuter proposed interventions.
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We see that market is very irrational now and it can stay irrational for long enough to destroy everything we know in tech.
By the time market figures things out, you may no longer have services, and hardware that you use daily. When such amounts of stupid money are pumped into a single industry, even if all AI companies went out of business tomorrow, it's going to take years for things to go back to normal.
FWIW, I'm not advocating taxes, as I think that won't really do anything. I don't know what the solution is either.
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People keep parroting this but I don't see GPU prices sorting themselves out.
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They didn’t the last two memory crunches. Litigative action figured it out first.
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Because this perfect version of capitalism you think exists, doesn't.
We live in a world with markets dominated by cartels of tech companies who don't play by the rules. Every other industry that impacts society in a negative way typically pays some sort of specialized tax to offset that, I don't know why these tech oligarchs shouldn't have too. It's wild how people just want to let them do whatever they want.
Everyone says we need to deregulate tech, and certain industries to get ahead of China.. Isn't it funny how their largely government controlled economy (to a degree) is annihilating the west on all fronts economically. We need far more regulation.
China will defeat the West solely because it regulates its billionaires, not the other way around like we have it in the West. And I hope so, the world is rooting for you China.
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Reads a bit like the Paperclip Maximizer appearing way ahead of schedule? Implemented not as AI, but as emergent behavior in the ways of the financial class (that happens to be about AI, singularity and all that).
> Time for an AI tax on the hyperscalers.
Like the purchase price + increased cost? The thing is that these parties are sitting on billions and billions of investor money, they don't care that hardware is 400x as expensive. Which companies like nvidia have capitalized on a few years ago, they were already able to price their hardware at a 400% markup compared to pre-crypto times, and shift their focus from consumer graphics chips to datacenter compute chips, causing their revenue to go up 6x (if my interpretation of [0] is correct)
[0] https://www.macrotrends.net/stocks/charts/NVDA/nvidia/revenu...
I assume this is a symptom of the wider ai hardware issue.
This is starting to feel a bit like universal paperclips to me, and we are on the verge of the next stage of industrialisation multiplication.
I guess its either quantum computing or the hypnodrones which will get us out of this mess one way or another...
More like China-factor to get us out of the mess. We wait for Huawei photonics gpus (end of this year), CXMT and YMTC ramping up production to flood the market or as Janet coined it overcapacity. You know China will undercut the price significantly.
China doesn't have enough to supply itself.
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All these macro technology predictions feel very WW2 Wunderwaffe to me
Slinging doom and gloom on the internet seems like engagement-bait to me at this point. If the suppliers aren't increasing production, they clearly see something all these armchair doomers do not, I'm sure the prices will normalize back to "normal" levels sooner than people think.
AI bubble won't last forever when a lot of compute is burned at a loss just so people can generate AI videos of sharks driving cars for social media shorts. It will burst at some point, at which HW manufacturing will have to lower prices if they still want to have enough sales to stay in business, since most of their current sales boom comes from HW they haven't even made yet.
OpenAI can't keep losing investor money forever with nothing to show for, at some point the first domino will fall, then the rest of the industry will go too from investor panic.
Nothing has ever burst when production can't meet demand
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I really don't think so. I feel like we're at a takeoff.
Senior engineers using AI coding are 10x more productive. My output has jumped dramatically. I'm a senior engineer and built six nines, active-active systems that moved billions of dollars a day. I am absolutely a beast with these models. I can replace an entire team just by myself. I'm literally shipping an entire week of features in half a day. I'm reviewing the code and planning the architecture - I am not dialing this in.
Video editors using video models can replace entire studio production departments. Writer-directors who know how to direct are essentially now Hollywood studios in their own right. I know a lot about this in particular because I've been making films as a hobby for 15+ years and work with a lot of industry professionals.
You'll see a lot of slop, but that's the same thing we got when we gave the masses cell phones with cameras attached to them. We still have plenty of amazing photographers in the world, and the means of creation are only getting cheaper/easier and the scope of creation for any individual is growing and growing and growing.
This is the next industrial revolution.
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My compliments for the hypnodrones reference
Thankyou, I have played many games of Universal Paperclips as I imagine you have as well.
Releasing the Hypnodrones is always a very satisfying milestone.
Room temp superconductors for chips and robots!
I really love that their notification email includes applicable price change for my specific servers.
The worst counter example of this was Mercedes sending me an email saying "the terms and conditions have been updated, please read them at this link". It linked to the 52 page document I was supposed to read through in its entirety and manually diff against previous! Good thing they started adding a change log in the emails after some customer push back.
My ISP sends me an SMS telling me there's work being done in my area. I have 3 different accounts with them in different citites. No idea which one they are talking about at any given time.
You guys got a notification??? I did not receive one.
Been running a handful of dedicated boxes on Hetzner for about 5 years now. Even with the increase, the price/performance ratio is still way better than anything comparable from the big three US clouds. Their AX-series auction servers especially.
What concerns me more than the price hike itself is the trend. Memory prices spiking, hard drives selling out, and now this. If you're running anything with serious storage or RAM needs, it's worth locking in what you can now. I grabbed an extra auction server last month just because the specs were good and I figured prices were only going up.
For anyone panicking about alternatives: OVH and Netcup are decent in Europe but have their own tradeoffs. OVH's network has been flaky for me, and Netcup's support is basically nonexistent. Hetzner's support has been solid every time I've needed it, which is worth something.
Still 90% cheaper than using AWS
AWS and Azure will have to increase prices soon too, they just have more existing hardware to postpone it for a bit longer.
> AWS and Azure will have to increase prices soon too, they just have more existing hardware to postpone it for a bit longer.
Also, like the parent said, they already charge ten times more.
I didn't think it was possible for Vercel to get more expensive, but I guess we're going to find out.
I just bought a Raspberry Pi 4 1 GB memory with aluminum case, aluminum NVME adapter, and a 64 GB SSD for about 80 euros. With microsd it’s even cheaper. 4 GB RAM would be about 120 euros.
The 1 GB RAM replaces one Forgejo runner that was in Hetzner. With €5 per month, I will earn this investment back in less than two years. After the price increase, this period will only shorten!
I also wrote about this at https://huijzer.xyz/posts/148/raspberry-pi-as-forgejo-runner
As a customer, I am OK with most increases but not the object storage one. This one has some quality issues and is no longer competitive in price either. I'm thinking of moving S3 part to OVH.
OVH are putting up prices in the same way, with the same reasoning. (I don't know about storage, but VPS stuff I'm using is going up ~20%.)
Used to be every VPS refresh cycle you'd get more server for less money. This is miserable
Is that why I recently got an out of nowhere 1.40 bill on my 4.90/mo OVHcloud VPS?
Still cheaper than US cloud computing.
In EU there are: Hetzner, OVH and Seeweb.
Also Scaleway
https://european-alternatives.eu/
OVH is nearly doubling their some of their VPS pricing soon.
I like Scaleway a lot too.
Also Contabo
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Why are they increasing the prices on already existing infrastructure? Is that a way to "subsidize" the new purchases?
I would expect a large provider like Hetzner to refresh hardware continuously - every year a fraction of old hardware is retired and replaced by new. Given price shock they could stop doing this but older hardware is less energy efficient and has limited life anyway.
But they cant refresh hardware already sold to customers can they?
So increasing prices on existing cutomer hardware is what, subsidising hardware refreshes elsewhere in the datacenter?
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Hetzner mostly ate up the rising energy prices in germany for the last 3 years and they have big problems with their hardware supply since then. It is hard to get cloud instances in nbg and fsn. So an increase in pricing is very much expected from my side.
German electricity prices have been falling for the last 3 years. They've been below the pre-war levels for a while now.
Hardware prices, especially with the current chaos, and the huge spike in demand they've doubtless seen is more than enough to explain this price hike though.
In their email they say their operating costs increased too. Whether it actually did or not, that is their reasoning to increase prices on already sold products.
Even existing hardware can fail, and swapping out memory or disks is expensive these days. :-(
Power and cooling costs also play a role, probably.
Even if you have an unbelievable PUE of 1.00, you are still affected by the energy cost increases. There's no running from that.
Edit: I misremembered the PUE formula. This comment has been edited to correct my mistake.
A PUE of 1.00 means all of your electricity is used for compute and none for cooling (and other things). "as much electricity for cooling as you spend of compute" would be a PUE of 2. It's "total / compute". And PUE of 2 would be quite bad, most facilities are better than 2.
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Variable costs increase ? (Floor space rental, Energy, Salaries, licenses, other services ...)
Somewhat weirdly I’m very happy about this price increase as a customer. The messaging is clear and completely understandable. Well done.
I just started the process of migrating to them yesterday. They are still very affordable. But a bit less. I'm estimating that our quite lean GCP setup cost is going to be cut to about 20-25% when I'm done. So, it doesn't affect my decision to go with them literally yesterday morning.
It's all a bit barebones and primitive but I don't mind. I spent yesterday tweaking some ansible scripts with codex to setup stuff like bastion hosts and nat networking. I expect I have most of the rest ready in a few days.
The benefits of having an uncomplicated docker compose and boring tech stack. No microservices. Just a monolith.
One issue that I don't have a solution for yet is disk encryption and encrypted bucket content. Probably solvable but not natively supported. Might trigger compliance issues with some of our customers.
I always found that compliance issue with encrypted drives a bit funny.
The provider has the keys.
So, the drives encryption has no practical application.
The drives in, say, GCP aren't even real drives, the blocks are chunked over a distributed pool of storage- you can't just grab a drive and walk away with an OS or a data volume, you'd just get random junk. - So what's the encryption going to do?
I guess it's harder to attach your drive to someone elses VM, but ultimately since the provider has the key it doesn't actually change anything there either, except that you need another API call to launch a drive and maybe there's different permissions on your drives key than on the drive itself?
idk, feels like a weird theatre that the providers get away with because they're so big; there's no practical way of even checking if they're following up with drive encryption either. So it really is "here you can input a secret key, that you choose, we promise to use it *wink*".
Totally absent any verifiable outcome, or actual threat model.
You're one of those that's going to laugh at the idea of "verifiable cloud" that Apple and others are pushing? How dare you stand in the way of AI everywhere!
There's no mention of RAM upgrades. If we bought RAM already at the old prices, are they being increased as well? The current pricing for RAM has more than quadrupled since January.
Hi there, To the best of my knowledge, anyone with *existing* RAM *add-ons* that were affected by price changes should have received a separate email. Please carefully check your email inbox/trash/spam. The general price changes we announced today will affect both new and existing products, like dedicated servers and cloud servers: https://docs.hetzner.com/general/infrastructure-and-availabi... Those prices will take effect on 1 April 2026. --Katie
Hetzner is currently cheaper than getting a static IP from my ISP + electricity, but just barely. I have a ton of local compute and can easily allocate one or two servers to take over if sufficiently motivated.
I wonder how many of Hetzner's customers are like me. I hope DRAM doesn't kill off cheap VPS providers like this one.
If you just want an app server pick up an hp elitedesk off ebay and a ups and run it on your home inet connection.
Note: your ISP might cut your account, and this might violate your home insurance contract — depending on jurisdiction.
At least where I live there’s a stupid amount of red tape for these things.
Your ISP will cut your account when you saturate the upstream pipe 24/7 for weeks on end... which will only happen if you host video.
And your home insurance will not know/care if you're operating a desktop-sized computer or even a single server (it is perfectly fine and expected a developer might bring an actual server home for troubleshooting). Home insurance only cares if you're running dozens of them.
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I've just been looking in to this as I've got quite a lot of older hardware that'll be fine for running some websites lying around.
My ISP has a static IP option for £5/month, but I reckon I can save £30/month+ on server costs even before any rises.
Ofc it does mean I have to do my own sysadmining, but a combination of my general knowledge + an LLM should make that relatively easy.
Watch out for the energy usage. What's electric now, 27p/kWh?
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IF you just want a Pizza, pour some tomato ketchup on sliced bread.
If you just want to pilot a 747, drive your car really fast at a skate ramp.
A 1000 calorie pizza is often overkill for a meal
A 747 is overkill for a fetching some groceries..
I'd have to trust my ISP not to randomly change my IP address. Unlikely.
This comes after OVH sent emails with really spicy increases too. Like north of 50
I got no such email, was this for VPS or dedicated servers?
Not sure which products but Reddit etc was in uproar
https://www.reddit.com/r/OVHcloud/comments/1ra5jzg/ovh_doubl...
Same, still 5€/month for my (now discontinued, apparently) VLE-2 box. Current VPS line-up (Intel based, though) is still quite cheap: https://www.ovhcloud.com/fr/vps/
For alternative European providers, I recommend OVH. Some euros pricier, but good.
If your only complaint with Hetzner is the price hike, though, it makes no sense to migrate to a more expensive vendor.
Used to have my VPS' with OVH a few years back but noticed the performance was significantly worse than similarly priced Hetzner ones. Not sure if that changed.
Regarding alternative VPS providers, Infomaniak in Switzerland have decent prices on their Lite range [0]. I'll stick with Hetzner but if I move some day, I might try them out.
[0] https://www.infomaniak.com/en/hosting/vps-lite
I checked yesterday. The cheapest vm I can get from them was something like 25 euros/month. The one I get from Hetzner was 6/month and now will be 8 per month. That's a 3x difference. A little cheaper than GCP/AWS. But not a whole lot. I went with Hetzner based on that as I'm trying to reduce an 800 euro/month Elastic Cloud + GCP bill to < 100 month. Even with the price increases, I should get below 100/month.
I've been on OVH forever, but recently switched to Hetzner as OVH doesn't have their equivalent of their auction servers which are great if you are looking for combinations of SSD + HDD servers. These don't really exist at OVH unless you pay > 200 euro / month.
I have received awful, slow, inaccurate support from ovh. Avoid.
OVH also increased their pricing significantly.
Still a fraction of the cost of most other providers, and wouldn't shock me if we see the others all doing something similar.
Good. This means the market is healthy.
Hopefully this also means new providers appear in Europe, to handle the increase in demand.
I am confused why the announcement page says CCX33 in USA "Old price" is €59.49 but their main pricing page shows €50.49 for CCX33 in USA
Announcement page: http://docs.hetzner.com/de/general/infrastructure-and-availa...
Pricing page: https://www.hetzner.com/cloud/
I assume that's with/without tax. Those German prices would be inclusive of their 19% VAT.
On one hand this is not good but predictable. I'm on longer-term commitments with OVH, so it will be interesting to see how they follow. I'm still keeping Hetzner on my shopping list, even with the increase the bare-metal offerings are within my budget, and now that prices have increases they should be stable for a while (also import for budget management).
Doesn't seem to apply to older/deprecated gen instances. I've got a CX22 there for personal screw-around projects and it's the same £3.95/mo (pre-VAT) afaict. So maybe not much help to folks ordering new or running on the current gen as the older kit isn't something you can order now, but a small boon for us laggards.
Sadly, today I received notice from Hetzner that indeed the prices on the older CX22 are going up.
Product previous price €3.95 New price as of 1 April 2026 €5.39 CX22 (HEL1) all prices incl. 20% vat
Western memory manufacturers decided to chase the AI bubble, abandoning the consumer and low-requirement markets entirely.
Chinese manufacturers are now capturing that entire segment with full vertical integration. When this bubble stabilizes, because it will (it's not going to grow to infinite), Western companies won't recapture those markets.
They've already ceded competitive advantage for the next decade. This is a structural shift, not a cyclical shortage.
It's another step in the transformation of Western industry that began in the '80s: the shift from real economy and human-centric production to financialized operations.
You're speaking like Hetzner is raising prices to fund Nvidia-laden datacenters, while in fact they're mostly providing cheap servers and their growth is mostly happening because of US admin's insanity.
Memory is going up for everyone, dude. And the people moving to Hetzner aren't exiting US clouds to leave for chinese ones.
Look at Chinese smartphone brands: Xiaomi, OnePlus took their slice from Samsung.
Same pattern will play out with RAM and SSD. In 3-5 years, it won't be 'Samsung' on the label, it'll be 'Li Tech' or equivalent.
Western manufacturers ceded the market through strategic choice; Chinese companies are filling it systematically.
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Something I don't quite understand is why the price of a used dedicated server is impacted by anything beyond electricity and land prices. It's not like the RAM gets replaced by new one every now and then. That's old RAM chip that's been bought years ago (and I believe largely amortized by now).
Is there any collocation space from which you can actually buy and own a physical machine without going there, and pay only the rent and traffic? I miss calling a server "mine".
You're not paying for the used server; youre paying for the used server and the replacement; thats how you can grow a business without assuming huge capex investments upfront.
I think its still common for colo spaces to have installation services for shipped-in hardware. You buy a server, configure it and ship it to the DC.
I moved from paying 24.50 a month to 25.39 a month for my little VPS plus storagebox.
CPX31 Cloud Server (Germany): €13.10 → €13.99/month (+€0.89, ~+6.8%) BX21 Storage Box: Unchanged Primary IPv4: Stays at €0.50/month
Hardware market has become very unpredictable, I have had vendors rejecting my replacement orders because new orders where 20% more expensive 15 days after I initially ordered the DRAM.
Wow. That sucks. hcloud was great for ages and highly competitively priced.
Vultr may be a good alternative. If you want to search VPS prices across the 6 major clouds (gcloud, aws-cli, hcloud, az, doctl, and vultr-cli) I made a wrapper TUI that lets you search, sort, and rent VPS.
See it here: https://tui.bluedot.ink
> Vultr may be a good alternative
I feel like a huge selling point of Hetzner is that they're based in Europe, and they're themselves citing that as the reason for a huge uptick in sales and new users. In that context, I don't Vultr is a realistic alternative.
OK, I never thought of it like that. It was always a price thing. For a while Vultr and Hetzner were much better value per unit.
What's behind the European push?
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I would be very surprised if all hosting providers didn’t increase their prices eventually.
This is it. Hetzner has always been very price competitive in its existence. Given the private ownership, I din‘t expect this to be a sudden outburst of greed, but to actually reflect rising costs.
If a provider has higher margins, they may choose to eat some of the cost. But I would not expect that to be the case across the board
Hetzner had the best prices out of any cloud I’ve used. Sad to see that they are raising prices, but was due to happen.
I have been buying older servers by the truckloads. Older being a year or so. It will be enough to host whatever outside AI that we need for the coming 15-20 years. And the all were great deals, will have them paid for within a month per server. I have my own cage full with empty racks bought from a bankrupt company in AMS.
> enough to host whatever outside AI that we need for the coming 15-20 years.
Not sure who "we" is, but I highly doubt you'll use those servers for 15-20 years.
We run production on servers 15 years old for our company/clients. Servers now are far faster and the software barely changes performance characteristic wise. We run Java, Perl & PHP ERP/departmental type projects; nothing that gets added makes anything slower and I don't see that happening either. Unless clients will want vastly different things, which, you know, they won't as they are big sluggish companies.
Curious about the specs of servers that you are buying. We are looking for some non-GPU HPC servers, but there's always the question of whether second-hand servers will be good-enough/power-efficient for our use case.
I understand that the market for hardware is insane right now, so it’s logical for prices to increase. But in a few years, when hardware prices are hopefully at a more reasonable level, will these providers reduce prices again or will we be eating these costs forever?
Does that mean they will upgrade the fleet? Can we get AMD Turin across the board? US cloud has been lacking.
They've only ever increased the ipv4 prices for already existing customers before if I am not mistaken. This is quite big.
EDIT: It's not a huge increase for dedicated servers. I already can't find anything comparable for more than the increased end price.
> AX51 (FSN1) € 63.10 € 64.99
> AX101 (FSN1) € 107.10 € 110.31
> They've only ever increased the ipv4 prices for already existing customers before if I am not mistaken
No, that's not true, they've done increases before, at least for VPSes only, I think that was 1 or 2 years ago or so?
You might be right. Sorry. I should have said they haven't increased prices for existing dedicated servers since my direct experince is only there. Actually until about 3-4 years ago when the whole world went to shit, using a server for a year or two then upgrading to a better server for cheaper, was the norm. In that environment, you would naturally not have price increases.
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I have a "server auction" system. Thankfully price increase for these is limited to 3%.
Server auction didn't change at all, the lowest price server is still around 33€.
Market for DDR4 is crazy, but not as crazy as DDR5.
Also a symptom of how inelastic hardware demands are. You would expect the purest k8s people to just shove workers on older machines and completely dodge this crisis, but we don't see that at all. Despite being an almost-commodity, many of the hw vendors still have a decent hand.
> Note: All "Server Auction" servers have a 3% price increase across the board.
Mine went from 36.30 EUR to 37.39 EUR, according to the e-mail that I got.
I'm actually very thankful that the Server Auction exists and lets some hardware be used like that, instead of becoming e-waste or something.
For what I get, those prices are more than reasonable. I feel a bit bad about the other prices that saw a way bigger of a hike.
Mine went from €33 to €33.99, so I definitely cannot complain.
Well it's an auction. They only set the starting price, and it keeps lowering periodically until someone buys.
What they can do is:
- Raise the price of already rented servers (which is happening Apr 1)
- Increase the minimum price beyond which a server is removed from auction and dismantled (I believe it is 30 euros right now)
Not the 1st of April yet, so makes sense the prices haven't changed yet
It's not just Hetzner cloud; got an email about increase prices on my dedicated server.
I think it was me guys I am [sorry](https://news.ycombinator.com/item?id=47085483#47090853)
Hm the pricing increase stresses me out out less than the server shortages. My impulse reaction is to buy a few cheap cloud VPS instances even though I don't need them right now... Anyone have any wisdom to encourage/discourage this?
I recommend Netcup as a solid EU budget alternative to Hetzner, zero complaints from me.
They are solid and cheaper, but they don't offer the same level of control plane and API access as Hetzner that is really helpful when managing a larger number of servers.
This is probably the best alternative provider for individuals that I could find, unless you're orchestrating a fleet of servers or something. Personally I'll wait out my next billing cycle with hetzner, as I expect other hosts to follow shortly.
Their ARM64 boxes are fantastic, but sold out at the moment.
Just for info, this is the big hike i received for my dedi.
Previous price: € 31.90
New price as of 1 April 2026: € 32.86
Mine is €34.51 to €35.55 (a 3% increase).
They're using Arbor, they were cheap for that exact reason.
Now that people don't care about Anti DDoS - this happens.
In the past everyone was leaving Hetzner for the OVH/Voxility due to terrible latency and nonexistent protection.
> Now that people don't care about Anti DDoS - this happens.
Could I prod why that is? I'm dealing with a ovh server and using their anti-ddos detection for an issue currently so this topic I'd like to learn about.
I haven't received this email, and I have one x64 server that costs around 4 EUR/mo, and an ARM server that costs about 6 EUR/mo. I wonder if I'll still be affected by the price increase.
For some reason I didn't get an email from them about this, even though one of my VPSs is in Helsinki.
Anyway, let's all please pretend that Hetzner is now way overpriced if anyone asks about it. :P
I almost didn't see their email because it's sent by "notification" (notification@hetzner.com, no name set). Title is "Update on our pricing".
Anyway my increase is: EX44 (HEL1) € 44.76 -> € 50.76
Not pleased especially as the reason for the increase for existing customers is a nebulous "The costs to operate our infrastructure has increased dramatically."
Why?
Maybe I have email notifications off.
I think it's RAM and server prices globally shooting up. Extreme RAM shortage and increasing hoarding of all types of hardware supplies.
This will be as a shockwave in web hosting industry, the same as it was with electricity price. There is nowhere to run. Everyone will increase their prices, unless hardware crysis ends up.
OVH increased prices by even more. So no reason to move.
My CCX13 (dedicated cores) went from 15€ to 20€ now. Looking at Netcup as alternative, more cores and more RAM for 12€ - anybody has experience with their root (kvm'ed) servers?
It's OK until you get into support troubles. I would say Scaleway/OVH might be better contender (but they are french hehehe).
well personally I do not expect support for a 12€/month product. Given cost of labour in germany/europe, just talking to a person for 10-20minutes destroys their profit margin for years. I DO expect uninterrupted service, though.
The main benefit seems to be avoiding dealing with the US. A
That probably doesn't work with Hetzner, they've got a hosting location in the US.
Sir, your logic is flawed. You can buy Adidas in the US too. Adidas is still 0% american.
This is likely just the first wave. If this component hoarding by AI continues, and it likely will, at some point, it will be just OpenAI and Anthropic who can afford to have compute.
This has affected SSDs first, then RAM, then HDD and it doesn't look like even HDD manufacturers are going to increase production. So unless groups of people suddenly learn how to manufacture all of this hardware and open factories quickly, it's going to be a very fun next few years.
People have been predicting SaaS will die for all the wrong reasons. It's not that anyone can ship a SaaS clone by prompting an AI, it's that nobody is going to have access to the hardware required.
Looks like this is IPv6-only pricing, by the way.
$0.60 will be added for the IPv4.
I couldn't find any changes on their keyturn stuff with the 'Webhosting' products?
Is the price hike only on Hetzner's offer for dedicated or VPS servers?
Hi there, we prepared a list here of affected products: https://docs.hetzner.com/general/infrastructure-and-availabi... --Katie
This mirrors the increased costs of people who already space + power in a DC, and want to buy new machines to fill their racks. Everybody is being hit.
How much is the cost for Storage Boxes increasing?
I don't see them listed on the announcement page (BX* products), so I'm guessing storage boxes prices will stay the same.
May or may not be related to a surge in VPS hosting of OpenClaws on Hetzner. It’s a very popular option right now.
Nice, so we finally know who's actually paying the costs for the AI boom, while the returns go exclusively to the scamers.
Netcup cancelled their winter sale as well
I got an email from OVH yesterday, they're putting the prices up on a VPS I span up last month by 20% ish.
36% as per the linked post, 38% was a typo.
Silver lining: can you imagine how dirt cheap RAM will be after that bubble has popped? Oh my...
RAM producers aren't adding more capacity on the non-HBM side of things, so we shouldn't see a dramatic drop in pricing if AI HBM memory demand drops.
If we end up with metric tons of unused HBM memory lying around, I'm sure that someone will design a general purpose computer using them, or design a HBM-to-DDR interface.
It won't. Demand is being pushed forward. That means that longer this situation take longer it will take for prices to recover to same levels.
If you delay your iPhone upgrade because of RAM prices, you're not going to buy two at once because you were delayed. So push, forward, push forward, sure, but to a point.
No manufacturer is increasing supply though. RAM, SSD, HDD - they just reallocated their existing supply to AI.
Your home systems can slot in HBM? Doubt that.
This is a simplistic view of why the prices are the way they are.
With the recent price spikes in memory and storage, this was just a matter of time.
Even my more then 11 years old server increases by 80 Eurocent! Dare you!
TL;DR Monthly prices for VPSes up around 30% on average, for dedicated servers 14% on average, based on the stated old and new prices in EUR.
Location/type, Average increase: Germany Dedi 14,1 % Finland Dedi 14,8 % USA VPS 30,9 % Singapore VPS 30,8 % Germany/Finland VPS 32,0 % Grand Average 23,8 %
How long before we invent a currency pegged to compute cycles
$BTC ??
companies that haven't turned a profit are outbidding the rest of the economy for hardware. that's not a supply shortage, it's a subsidy funded by venture capital.
For out 30-40% increase in infra would crucify some companies!
Ouch. OVH are also going to increase their prices.
Well, €1,20 increase isn't going to break it.
Surely that means that as soon as prices of ram drop, Hetzner will also drop the prices, right? RIGHT?
Hezner reducing prices is not unprecedented. I think RAM chips getting cheaper is a less likely event than Hetzner responding with dropping prices
At best they would freeze prices for a few years which would be a real term decrease
Would have to be quite a few years - last time price bump was in 2022 by 10% due to increase in energy costs because of the war in Ukraine. Naturally prices didn't go down.
My increases were around 4%
with no explanation of why?
https://www.hetzner.com/pressroom/statement-price-adjustment...
Text in full:
> There have been drastic price increases in various areas in the IT branch recently. That is why, unfortunately, we must also increase the prices of our products.
> The costs to operate our infrastructure and to buy new hardware have both increased dramatically. Therefore, our price changes will affect both existing products and new orders and will take effect starting on 1 April 2026.
> We have genuinely tried hard to optimize our costs and to prevent increasing our prices for as long as possible. But we can no longer compensate for the strain that it has placed on our operations. We want to continue to deliver quality products that meet both our standards and your expectations, so we must take this step.
> The price changes take effect on 1 April 2026 and are for both new orders and existing products. There is list of affected prices on Hetzner Docs at https://docs.hetzner.com/general/infrastructure-and-availabi....
A hosting company referring to the core of their business as "the IT branch" doesn't instil confidence.
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this should be the link instead. @dang
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Knock-down effects from the RAM shortage, starting to see CPUs shortage (lead times for Intel at 6 months for server-class CPUs, AMD also notified enterprise customers about a crunch), GPUs shortage, storage prices are increasing a lot as well.
Everything is much more expensive on the hardware-side at this moment, I think we will see these price increases across any provider that requires hardware, I'm just waiting until Backblaze notifies they will also need to increase pricing due to this.
AI is sucking money from everything, not only financial markets, it includes all of us consumers of anything that requires hardware to run on.
Hopefully this craze dies down in the next 1-2 years because it will be untenable to be paying 2-3x prices for the same technology we had for quite cheap just a year ago...
AI race pushed up prices for the hardware (and likely everything you need to build/maintain a DC). Rising cloud costs was only matter of when, not if.
Presumably cost of hardware has increased due to ram and disk shortages, and they have to pass that on at some point.
From the email:
> For example, the cost for DRAM memory has increased up to 500% since September 2025.
That is an utterly insane price hike. Is production being scaled up, and will that take years? Or are producers happy charging 5x the price for the same amount of effort?
How much of this is driven by speculation vs actual demand?
I understand the Ai slop casing hardware supply issues and so naturally you'll see an increase in price, but this one is confusing :
> Note: All "Server Auction" servers have a 3% price increase across the board.
Why would that warrant an increase if the HW is already there ?
Maybe because they still have to pay for part replacements?
Maybe, I guess I assumed it was just already plug and play but probably there is some hardware changes there.
Edit :Yes, it seems your right, I should have checked,
> Support services replacement of defective hardware
"Edit: It's 36% ! Can't edit the title typo of 38%"
Thanks, AI.
I tried to sign-up with Hetzner instance last night - after all the signup etc, it expects me to enter my passport information for "verification". Fuck that.
[dead]
This excuse "we need to raise prices because we have more demand" is BS. They should be truthful and say "we can increase prices and people will pay it because they want to be EU based"
To be honest for anything more serious than a personal Minecraft server hetzner has been beaten by ovh for ages (on bandwidth - you get all you can eat data limited by speed from ovh - for example 500mbit, instead of 20tb from hetzner).
For this reason hetzner is always a "backup DC" in my eyes and never the primary.
Also I heard they are extremely sensitive regarding abuse allegations so don't even think of hosting something someone may not like seeing...
They get a lot of hype, but there are many competitors worth looking at.
It's happening on April 1. Should we take it seriously?
... more customers so they must increase prices? This seems backwards from how scale usually works.
It is, but more customers at a time of historically high component prices will do it. If you set your costs assuming every user's hardware is $1, and your customer base doubles when the hardware is $2, you're going to have to raise prices for everybody
The next set of hardware purchases will cost more than their last set of hardware purchases, and that's going to outweigh any labour economies of scale given just how many hardware components are in shortage this year.
If their growth had been in their projections in say 2024, they might have just been able to skip a round of hardware purchases, but the combination of growth meaning they must expand their hardware and hardware costs made this inevitable.
Can anybody predict this craze? The classical memory manufacturers are not yet adding additional manufacturing capacity. They learned this hard way in the past. That means, the demand is here to stay for years without typical bubble burst. Is this a point where Chinese companies will rise worldwide?
The massive DC overbuild matches demand, prices normalise somewhat in 3-5 years.
The massive DC overbuild does not match demand, prices tank in 3-5 years.
Third possibility: some approach like Taalas renders the current storyline meaningless. Would put 3 in 10 odds of this happening but I'd looove to see it.
Fourth: entire planet gets profoundly sick of emdashes, we all move back into caves and live in eternal gratitude of the moment humanity woke up to how little all of this really matters.
Hard to predict. If the bubble pops (NVIDIA and "circular economy", massive FAANG datacenter expansion plans, huge LLM training budgets) the markets will once again be flooded with components.
But, the shortages may very well continue into 2027, leading to some manufacturers going out of business and yet another massive redistribution of wealth.
I just hope the whole thing comes crashing down and we can buy GPUs and RAM again.
I mean I might not have a job in that economy, and my pension might be screwed but I'll have 192GB ram so I should be fine.
Running a small project on Hetzner from Germany. Got the email this morning. Honestly, even after the increase their dedicated boxes are still absurdly cheap compared to what you'd pay at AWS or GCP for equivalent specs.
The real story here isn't Hetzner being greedy. It's that AI companies are vacuuming up every DRAM chip on the planet and the rest of us get to pay the tax. I priced out a RAM upgrade for my home server last week. Same kit I bought 8 months ago for 90 EUR is now 400+. That's not normal market dynamics.
What worries me more is the second-order effects. Startups that would normally spin up cheap VPS instances to prototype and iterate now face meaningfully higher costs at the exact stage where every euro matters. The "just deploy it" culture that made European indie dev scene so productive was built on sub-10 EUR/month boxes. Those days might be over for a while.
"The real story here isn't Hetzner being greedy. It's that AI companies are vacuuming up every DRAM chip on the planet and the rest of us get to pay the tax."
We might also have our aquifers depleted and our electricity prices skyrocket. But at least we see really great benefits, such as being able to script some side-project while unemployed due to AI.
>aquifers depleted
Oh it's this thoroughly debunked talking point again.
https://andymasley.substack.com/p/the-ai-water-issue-is-fake
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Anyone who thinks modern data centers don’t use recirculated water can safely have their opinions summarily discarded.
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Grim
> It's that AI companies are vacuuming up every DRAM chip on the planet and the rest of us get to pay the tax.
DRAM is priced based on supply and demand, like every other market.
When demand goes up, the price goes up for everyone. It’s not a “tax” on the rest of us in any sense. There’s just a lot of demand everywhere.
> That's not normal market dynamics.
This is actually a textbook example of markets functioning in response to a demand shock where supply cannot be increased rapidly.
I do find it interesting that so many people think “market rate” means the opposite of what economics teaches, and that prices should stay stable and not change much when the economic conditions change.
I also find it interesting to read all of the “we shouldn’t let them…” takes in response to this situation. The DRAM market is international. Trying to restrict it in one country would just see the data centers get built in another country.
Saying this is just the market...is like saying housing is a free market after hedge funds buy your entire neighborhood...
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> When demand goes up, the price goes up for everyone. It’s not a “tax” on the rest of us in any sense. There’s just a lot of demand everywhere.
> This is actually a textbook example of markets functioning in response to a demand shock where supply cannot be increased rapidly.
You act like it's a competitive market. It's not the case. It's an oligopoly with an extremely inelastic supply side.
The market is already completely broken and ineffective due to concentration and export controls. The actual response to a major demand shock should be investments to increase capacities but it's currently extremely limited because suppliers want to protect their margins and fear the market contracting again.
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> It’s not a “tax” on the rest of us in any sense. There’s just a lot of demand everywhere.
Curious on whether you will still hold your stance if OpenAI gets a taxpayer bailout. Even disregarding a bailout, they are already lobbying hard for tax credit expansion.
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Most markets don't have three purchasers trying to corner the entire supply of one product.
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> This is actually a textbook example of markets functioning in response to a demand shock where supply cannot be increased rapidly.
The problem is that demand is being propped up by speculative capital. The AI companies are a bubble that is suffocating productive parts of the market with the hording of capital which they're now using to also hoard hardware. All this without making money for data centres that aren't build yet, for a handwavy promise that an AGI will magically solve all the worlds problems.
This is not normal, and it is not good for the broader economy.
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> Trying to restrict it in one country would just see the data centers get built in another country.
I'm surprised this isn't already what's being done. Inference doesn't require super low latency with the client, and the population's support of AI (and especially data centers for it) is waning quickly. This feels like another ideal use case for outsourcing the stuff Americans don't want to see to somewhere that it'll be someone else's problem.
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Factory capacity does not follow market dynamics easily
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Can't agree more. We can also predict with some confidence that in a year or two, supply would have adjusted and ram will be cheaper in the long run. We benefit from the expanded demand even if the fact that it first lands as a shock is disruptive to prices.
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The problem is that OpenAI has cornered the market. Maybe they haven't crossed the legal line or more to the point no one in this corrupt and incompetent administration is going to prosecute them, but buying up 40% of a market which hasn't got any additional capacity is cornering by any measure.
So yes, this is not a normal market. Your claim of a functioning market is the same as saying my laptop, having lit on fire, is a functioning computer after having 10,000 volts applied across it.
> DRAM is priced based on supply and demand, like every other market.
Please don't explain it away like that - you are referring to the theoretical "ideal" market where a bunch of small companies compete with low margins to the benefit of the wider customer base. This is not what is happening. We have a couple of intrinsically worthless, LLM-whale companies, working literally to swallow and entshittify literally everything in their weird transhumanist/accelerationist/weirdo way. To add to the insult, the whole creation of artificial scarcity is almost a political construct, paid for with "monopoly-the-game-money" that these companies DO NOT EARN but instead BORROW based on vague and dishonest promises of achieving a "Country of PhDs in a datacenter"/"Pocket PhDs"/"AGI by 2025" (oops, now apparently by 2028 according to the OpenAI CEO). In their weird vision, as humans we should be merely cattle to be managed, not independent spirits with interest and aspirations. That ghoul Karpathy speaks about "ghost in the machine", overlooking the magnificence of the already existing "ghost in the machine" in the form of human beings. We should not have to swallow the increasingly crappier future these folks are insisting on pushing on all of us.
In many countries, its illegal to manipulate prices in bulk.
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AI demand is subsidized by the bubble. Those operators buying the RAM are not paying using money that exists. Market economics are not working here.
"it happened therefore it's normal"
But aren't those the same startups that think they need to run on AWS EKS instead of using a single cheap server? The cheapest used Hetzner server currently is €39.24 / month:
- Intel Core i7-6700 - 32 GB - 2 x 480 GB Datacenter SSD - 1 GB/s - 20 TB traffic
Their VPS are even cheaper. And you can run a lot on this.
Similar to my favourite OVH servers, but I have unlimited traffic at 0.5Gb/s 64gb ram and dual mics. Similar price (with vat in Poland).
If you wanted to run same workloads on Aws it would cost you few hundred euro a month.
I see a silver lining to all this. At least maybe the silly "throw more horizontal scaling at it" will stop being a default response to all performance problems and people that are able to squeeze more processing out of the same hardware will be sought after again.
If your only need is a lot of bandwidth with very low server CPU use that’s fine.
That CPU is ancient, though. Over a decade old. That DRAM is 2-channel DDR3.
This could be a good deal for someone, but entrusting your startup’s operations to a 10 year old slow computer in Germany instead of using EKS would be an extremely short sighted move. A startup should be developing software and shipping it quickly to validate the market, not pinching pennies to save the equivalent of a couple hours of developer salary.
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Except 40€ a month is extremely poor value for this CPU that's more than a decade old.
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Excuse me, but if the difference between 10 EUR per month and 14 eur per month is going to kill your startup, you probably shouldn't try to start it. Might be time to think about using and creating less memory-hungry software.
Actually I disagree. I've killed projects because I've run out of time for them and didn't like them costing me £50 a month. If I'd been able to keep them going at £10 a month, I might have kept them going until I could get back to them. Sometimes startups fail just because the owners get distracted by life, and the project just needs more time.
Hetzner should not be compared to AWS or GCP for pricing. It should be compared to Vultr, Linode or DigitalOcean.
Of which DigitalOcean is running very outdated prices at 4USD for 512mb ram.
The cheapest Kimsufi dedicated server with 32GB ram is $11.10/mo.
1) this reads like it's posted by an LLM
2) why could they not just up the prices for new deployments, like they did with their dedicated servers? I think that would be fairer to existing customers
If you have a company, I can recommend leaseweb for cheap hosting. I host my personal stuff like my email and my ente.io instance there. They are cheaper than Hetzner (already before the new price increase) if you don't need managed k8s.
> Same kit I bought 8 months ago for 90 EUR is now 400+. That's not normal market dynamics.
That's exactly normal market dynamics during acute shortage. Remember 2020 when filtering face masks went up in price 10-100x?
On the plus siide, we all get to learn how few new computers are needed rather than chase number goes up.
> That's not normal market dynamics.
It is, in fact, normal market dynamics.
A single company that never made a profit outbiding the entire world is normal?
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It's normal market dynamics for markets dominated by quasi-monopolies, which is why regulation should have prevented the existence of such markets.
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Maybe not normal market dynamics, but typical human behavior: https://en.wikipedia.org/wiki/Vincent_Kosuga#Cornering_the_o...
Warning: another bot - check their history.
The reason Hetzner was cheap was bad latency and Arbor.
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When I have looked on Newegg and on Amazon USA last month, I have seen even greater prices than here in Europe, by 30% to 40% greater, which is reversed from previous years, when computers and computer-related components were cheaper in USA than in Europe.
So I think that the victims are all the computer users of the entire world, with the exception of a negligible number of humans tied to the AI companies. Moreover, the US victims appear to be hit by the price hikes even more than in other countries, at least for now.
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Man alive, stop being performatively dense. Getting to pay "the tax" in this context is just a colloquialism equating getting to pay "the burden".
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Everyone knows what they mean, it's obviously not a real "tax".
The overhyped AI bubble needs to pop already.
... and still remain far too cost-effective. Frankly this says more about the rest of the industry than for hetzner
some hetzner alternatives please.
Ah yes, the abundance of AI that keeps on giving.
welcome to europe.
English: https://docs.hetzner.com/general/infrastructure-and-availabi...
In case anyone else is wondering why the figures are different: this link is exclusive of VAT.
Thanks, updated!
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uh oh
Competing on price never lasts.
BuyFromEU is the funniest subreddit there is right now. Unintentionally but still entertaining. EU has managed to paint itself into unenviable corner. I can't buy from EU even thought I want to because for physical goods - cross country shipping costs are prohibitive and for digital - they are either subpar, more expensive or both.
Try this as experiment - try to buy something like precision dowel pins from Poland or DOLD Mechatronik with shipping to Greece, Bulgaria or Romania vs the same thing from Aliexpress or Temu. Chinese costs are cheaper even if they have to fly here.
QC / Cheap Shipping / TEMU or AliX Pricing
Pick 2.
Not to mention that from July 1, 2026, the EU is abolishing the €150 duty-free threshold for non-EU shipments. This is specifically targeted at the flood of packages from marketplaces like Temu and Shein.
From July there will be a flat customs duty of €3 for small consignments. This fee applies per category. If your package contains items from different product groups (e.g., a shirt and a cable), you might pay the fee multiple times.
The Goal: To create fair competition for European retailers who can't compete with subsidized shipping and tax loopholes from massive non-EU sellers.
This will obviously have a knock-on effect for larger shipped items which are presumably subsidised at the bottom line by these parcels of fast-fashion and eWaste.
As someone that frequently buys low-cost second hand electronics from Japan, I am a little frustrated about the €3 per-category customs duty. That means a €80 package of various old game cartridges, retro handhelds, digital watches and collectables will now have another €12 to €24 on top of the 21% VAT and €6 handling fee. For an €80 package I am now looking at €15 for shipping and €34 to €46 in import cost. That kills a fun hobby.
>Try this as experiment - try to buy something like precision dowel pins from Poland or DOLD Mechatronik with shipping to Greece, Bulgaria or Romania vs the same thing from Aliexpress or Temu. Chinese costs are cheaper even if they have to fly here.
This is an awful experiment. Only consumers care about delivery costs on deliveries like these, and what you're looking at are explicitly not goods aimed at consumers.
Okay. Then buy pizza oven from Italy and see how shipping costs are 60% of the price of the oven.
Anyway - you seems to misunderstand. If transporting something from Shenzhen to Franfurt is cheaper than transporting the same thing from Krakow to Thessaloniki - means that EU has fucked up royally in its main mission - to facilitate movement of goods. WE have ungodly patch of local carriers and courier companies and a lot of friction in every kind of intra eu goods movement.
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The reverse is true too. The shipping costs from US -> EU are prohibitively high, oftentimes making ordering stuff from the US a no go. I think only Amazon (for certain products at least) charges somewhat reasonable shipping costs.
China has an enormous leg wrt shipping.