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.
Low yields means their production can cost more than they sell it for, which is not sustainable. They have to have yields good enough that they can make money, otherwise the government is just subsidizing a give away, which is fine if they don’t export them but wouldn’t make sense if they do.
Chinese planning revolves around mastering a technology no matter the cost, then monopolozing the global market no matter the cost, then bankrupting existing foreigner competitors or entirely preventing them from arising in the first place no matter the cost, to only then caring about costs and to start profiting from it all.
That's where capitalism-with-Chinese-characteristics comes into play, since the CCP knows it's a capacity they want to get some independence from the government creates incentives to develop it until it becomes self-sustainable.
They have a strategic goal which the government will support while at the same time letting competition do its thing, it's a step above from what other governments used to do with government-backed R&D that would eventually be developed by the private sector into products.
Not sure why other countries aren't adopting this model adapted to their own needs, seems very effective so far. Well, I'm not sure but have a big hunch it's the usual big business blocking it since it'd create more competition in a more level playing field.
Why would the CPC (the correct acronym) subsidize cheap GPUs to America? You won’t see huawei GPUs here until their yields are decent enough to make it profitable.
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 mean it will be the employers of those programmers and at $5000/dev/month I expect a businesses will start demanding very tangible returns from this spend. And as much as I love the tools I don't think it's generating that much direct business value. It's very obviously not turning $140k devs into $200k devs.
>All it'll take is one company to go bust, oracle for example, for the whole thing to deflate
Provided that of course, the US administration will be incorruptible enough to not bail out these tech companies with taxpayer money when they do eventually fail.
But when you see the connection between Larry Ellison and Trump, you realize the whole "free market competition" is a scam for suckers. Always has been, just that now they don't even bother to hide it via some complex facades and shell games to garner a veneer of legitimacy, it's straight up banana republic style of corruption.
> Provided that of course, the US administration will be incorruptible enough to not bail out these tech companies with taxpayer money when they do eventually fail.
I'd love them to try that because virtually no one on any part of the political spectrum would get behind that besides the most corrupted and soulless ghouls masquerading as politicians
I dunno between following the party king and "we must bail them out to avoid total economic collapse" (real or imagined), I wouldn't be betting against bailouts.
I'd love them to try getting caught on audio asking a governor to find votes, and campaign on pardoning people convicted of treason because virtually no one on any part of the political spectrum would get behind that besides the most corrupted and soulless ghouls masquerading as politicians.
I could have substituted many other things up there. I was very naive when I thought getting caught on audio talking about grabbing women by the pussy and being able to do whatever you want to them because you’re a celebrity was one of those things too.
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.
So prices will need to increase -- if it makes a senior engineer 10x more productive then coding assistants could easily cost 20x-100x more then what they cost today. Same for video generation.
Given that 10x engineers cost in the millions and that movies cost in the hundreds of millions - this is okay!
Edit: HN rate limit won't let me reply, so here -
I'm saying that hiring ten senior engineer costs millions. (Not a single 10xer - that's such a debated thing anyway, Fabrice Bellard or not.)
AI companies will make bank when they've hooked us all on the tools and raise prices.
Companies would likely rather pay $500k/yr to Anthropic and $750k/yr to engineers than $2M/yr to an uneven team of humans with HR, taxes, and other expenses, attrition, etc.
The price of tools isn't determined by how much money they make or save the user. That's just the price cap. The price floor (in the long run) is the cost of making the tool. The actual price will be somewhere in between depending on competition.
How many 10x engineers paid millions are out there? How can you stay in business as an AI company by only charging those 10x engineers 200/month?
Edit: Fabrice Bellard is a 10x engineers because he invents cool and innovative tools that didn't exist, not because he can bang out code 10x faster. AI can't replace fabrice Ballard.
If you are able now to create 10 products instead of 1 in the same time frame you will have to plan, review and maintain 10 things instead of 1. How can this work? I mean to double your productivity is a huge jump but 10x sounds unsustainable.
Well, AI fanatics aren't about longevity or maintaining things. The fact that the LLM spit out a bunch of code is good enough for them. Drive-by PRs and vaporware are their bread & butter.
Yea but are you paying a profitable amount of money to your service provider for you to do it? I find it hard to believe that Anthropic is profiting off of my $100/mo subscription based on how active I keep my machines running.
The numbers mentioned by Ed Zitron in his podcast Better Offline recently suggested that a $200/mo Claude subscription allows you to spend $2300 - $2700 worth of Anthropic tokens. That's pretty bad, but better than I expected.
I don't see it being unreasonable that models and infrastructure could improve enough to bridge the cost gap within five to ten years. It's just that the AI companies already spend so much money that it might not matter.
The video models aren’t that good yet but for coding the utility is clear, yes. To be fair Darren Aronofsky also overestimates their quality.
Correct me if I’m wrong, but generating video is also much more resource intensive than equivalently productive text-only model use. It seems the industry could save itself a lot of hassle and infamy by simply avoiding artistic fields.
>Senior engineers using AI coding are 10x more productive.
Are the subscriptions of those engineers enough to make their use-case profitable and on top to also be subsidizing the cost of AI video slop generation and keep the company profitable?
>Video editors using video models can replace entire studio production departments.
Then why is OpenAI losing more an more money?
>This is the next industrial revolution.
I'm not saying it isn't, but we did have the .com bubble burst even though that was also revolution. Something can be a bubble and a revolution simultaneously. The internet didn't go away after the .com bubble burst, just the crazy speculations did, which is what I was saying will happen with the AI bauble. The bubble will burst and only the profit generating parts of AI will remain.
What people mostly see is the illusion of productivity. But the measure should be outcomes, not the amount of stuff made. If a factory produces 10x the product but it is only 1/3rd the quality of what it was before that is long term unsustainable and leaves the door open for a competitor to attack them on quality.
This is the key driver behind all those 'enshittification' problems that we see. Quantity over quality is almost always a balance and not a binary, if you start treating it as if one should always trump at the expense of the other then sooner or later it will catch up with you.
> 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.
So you can review so much code so fast? Are you sure?
In many companies code reviews (properly) are the bottleneck. This was the case without AI. Now you're saying AI is giving you 10x more code reviews and you're even faster.
What am I missing?
p.s. I agree AI can make you and things faster just not suddenly god mode.
10x AI speed up only happens when you stop reading the code (or start skimming it, etc). This is pretty obvious to anyone that uses the tools and many vibe coding proponents have said as much.
Sacrificing quality for quantity makes these tools much less impressive. I say this as I tab over to my bug ridden memory hog CC tmux tab.
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.
This is soul destroying. Literally made my day worse thinking about this.
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.
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.
Thanks. Looks like I misremembered the formula. We run way lower than 2. I have seen some systems running with 1.0x values (I don't remember the exact value).
However, this doesn't mean that the increase in energy costs are not affecting Hetzner.
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
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.
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.
> 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.
Seems poor translation. The German version only speaks about rising costs in various areas, no mention of any IT branch. They probably meant the whole IT market in general, not specifically their own company or some branch of it.
It's a German hosting company making a translation error from the German "IT-Branche". The wording doesn't appear in the German version, but very well could have at some point in the process.
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...
Hetzner has proven yet again that they never could be trusted, that they will betray their customer. A 30-40% increase is not justified by any other cloud. There are plenty of low-cost small clouds one can use, ones that won't screw you over with such a price hike or other surprises.
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.
Neither does anyone else. Key difference being they planned for this 5 years ago instead of last quarter
Planned doesn’t mean achievable. The yields are still low.
Low is better than nothing.
Low yields means their production can cost more than they sell it for, which is not sustainable. They have to have yields good enough that they can make money, otherwise the government is just subsidizing a give away, which is fine if they don’t export them but wouldn’t make sense if they do.
China has plenty of money to subside low yields while they improve their technology.
Chinese planning revolves around mastering a technology no matter the cost, then monopolozing the global market no matter the cost, then bankrupting existing foreigner competitors or entirely preventing them from arising in the first place no matter the cost, to only then caring about costs and to start profiting from it all.
Sounds like SV VC culture.
That's where capitalism-with-Chinese-characteristics comes into play, since the CCP knows it's a capacity they want to get some independence from the government creates incentives to develop it until it becomes self-sustainable.
They have a strategic goal which the government will support while at the same time letting competition do its thing, it's a step above from what other governments used to do with government-backed R&D that would eventually be developed by the private sector into products.
Not sure why other countries aren't adopting this model adapted to their own needs, seems very effective so far. Well, I'm not sure but have a big hunch it's the usual big business blocking it since it'd create more competition in a more level playing field.
Why would the CPC (the correct acronym) subsidize cheap GPUs to America? You won’t see huawei GPUs here until their yields are decent enough to make it profitable.
CCP is the common one even though not the official, either use is fine and understandable (as you've understood it clearly).
What do you mean? I'm talking about the CCP funding projects to increase yield for their fabs, not buying GPUs from NVidia...
> CPC (the correct acronym)
https://en.wikipedia.org/wiki/Chinese_Communist_Party
Read the very first sentence.
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.
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!
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
It always bursts when demand stops. Current demand is artificially pumped up and financially unsustainable aka a bubble,
demand is increasing exponentially, and barely anyone uses AI
All exponential growth curves are actually S curves, before the inflection point.
The free demand is increasing. With price increases hitting the cloud, will there still be demand?
programmers paying $200/month will be forced to pay $2000/month or $5000/month or be without a job
At this point all the programmers will stop using ai, hence bubble bursting.
What is the point of paying $5000/month to keep a job which pays $10000/month?
I mean it will be the employers of those programmers and at $5000/dev/month I expect a businesses will start demanding very tangible returns from this spend. And as much as I love the tools I don't think it's generating that much direct business value. It's very obviously not turning $140k devs into $200k devs.
The demand being: "trust me bro we will pay you when we're profitable"
All it'll take is one company to go bust, oracle for example, for the whole thing to deflate
Plus you're factually wrong, it happened for fiber optics and railroads
>All it'll take is one company to go bust, oracle for example, for the whole thing to deflate
Provided that of course, the US administration will be incorruptible enough to not bail out these tech companies with taxpayer money when they do eventually fail.
But when you see the connection between Larry Ellison and Trump, you realize the whole "free market competition" is a scam for suckers. Always has been, just that now they don't even bother to hide it via some complex facades and shell games to garner a veneer of legitimacy, it's straight up banana republic style of corruption.
> Provided that of course, the US administration will be incorruptible enough to not bail out these tech companies with taxpayer money when they do eventually fail.
I'd love them to try that because virtually no one on any part of the political spectrum would get behind that besides the most corrupted and soulless ghouls masquerading as politicians
I dunno between following the party king and "we must bail them out to avoid total economic collapse" (real or imagined), I wouldn't be betting against bailouts.
I'd love them to try getting caught on audio asking a governor to find votes, and campaign on pardoning people convicted of treason because virtually no one on any part of the political spectrum would get behind that besides the most corrupted and soulless ghouls masquerading as politicians.
I could have substituted many other things up there. I was very naive when I thought getting caught on audio talking about grabbing women by the pussy and being able to do whatever you want to them because you’re a celebrity was one of those things too.
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.
So prices will need to increase -- if it makes a senior engineer 10x more productive then coding assistants could easily cost 20x-100x more then what they cost today. Same for video generation.
Given that 10x engineers cost in the millions and that movies cost in the hundreds of millions - this is okay!
Edit: HN rate limit won't let me reply, so here -
I'm saying that hiring ten senior engineer costs millions. (Not a single 10xer - that's such a debated thing anyway, Fabrice Bellard or not.)
AI companies will make bank when they've hooked us all on the tools and raise prices.
Companies would likely rather pay $500k/yr to Anthropic and $750k/yr to engineers than $2M/yr to an uneven team of humans with HR, taxes, and other expenses, attrition, etc.
Anthropic is going to make bank.
The price of tools isn't determined by how much money they make or save the user. That's just the price cap. The price floor (in the long run) is the cost of making the tool. The actual price will be somewhere in between depending on competition.
> Edit: HN rate limit won't let me reply, so here -
There is a reason for that...
How many 10x engineers paid millions are out there? How can you stay in business as an AI company by only charging those 10x engineers 200/month?
Edit: Fabrice Bellard is a 10x engineers because he invents cool and innovative tools that didn't exist, not because he can bang out code 10x faster. AI can't replace fabrice Ballard.
Yap, that's what people don't want to hear.
Right now we are in the cheap phase.
Price can easily triple
> Price can easily triple
They can just as easily plummet to a fraction. Really depends on wether there's value for the entities that are paying
If you are able now to create 10 products instead of 1 in the same time frame you will have to plan, review and maintain 10 things instead of 1. How can this work? I mean to double your productivity is a huge jump but 10x sounds unsustainable.
Well, AI fanatics aren't about longevity or maintaining things. The fact that the LLM spit out a bunch of code is good enough for them. Drive-by PRs and vaporware are their bread & butter.
Do you get paid 10x? Does your company make 10x?
Nope, because the only companies making money on this bs are companies selling pickaxes and shovels
Yea but are you paying a profitable amount of money to your service provider for you to do it? I find it hard to believe that Anthropic is profiting off of my $100/mo subscription based on how active I keep my machines running.
The numbers mentioned by Ed Zitron in his podcast Better Offline recently suggested that a $200/mo Claude subscription allows you to spend $2300 - $2700 worth of Anthropic tokens. That's pretty bad, but better than I expected.
I don't see it being unreasonable that models and infrastructure could improve enough to bridge the cost gap within five to ten years. It's just that the AI companies already spend so much money that it might not matter.
The video models aren’t that good yet but for coding the utility is clear, yes. To be fair Darren Aronofsky also overestimates their quality.
Correct me if I’m wrong, but generating video is also much more resource intensive than equivalently productive text-only model use. It seems the industry could save itself a lot of hassle and infamy by simply avoiding artistic fields.
>Senior engineers using AI coding are 10x more productive.
Are the subscriptions of those engineers enough to make their use-case profitable and on top to also be subsidizing the cost of AI video slop generation and keep the company profitable?
>Video editors using video models can replace entire studio production departments.
Then why is OpenAI losing more an more money?
>This is the next industrial revolution.
I'm not saying it isn't, but we did have the .com bubble burst even though that was also revolution. Something can be a bubble and a revolution simultaneously. The internet didn't go away after the .com bubble burst, just the crazy speculations did, which is what I was saying will happen with the AI bauble. The bubble will burst and only the profit generating parts of AI will remain.
This is yet to be seen. Certainly feels like I'm more productive but I'm not seeing any faster results. It would be nice for this to be studied more.
What people mostly see is the illusion of productivity. But the measure should be outcomes, not the amount of stuff made. If a factory produces 10x the product but it is only 1/3rd the quality of what it was before that is long term unsustainable and leaves the door open for a competitor to attack them on quality.
This is the key driver behind all those 'enshittification' problems that we see. Quantity over quality is almost always a balance and not a binary, if you start treating it as if one should always trump at the expense of the other then sooner or later it will catch up with you.
> 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.
So you can review so much code so fast? Are you sure?
In many companies code reviews (properly) are the bottleneck. This was the case without AI. Now you're saying AI is giving you 10x more code reviews and you're even faster.
What am I missing?
p.s. I agree AI can make you and things faster just not suddenly god mode.
10x AI speed up only happens when you stop reading the code (or start skimming it, etc). This is pretty obvious to anyone that uses the tools and many vibe coding proponents have said as much.
Sacrificing quality for quantity makes these tools much less impressive. I say this as I tab over to my bug ridden memory hog CC tmux tab.
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.
This is soul destroying. Literally made my day worse thinking about this.
10,000 students go to film school every year. A handful of them will have the autonomy and scope they want. The rest of their dreams die on the vine.
This is my friends' lives.
That should make your day worse.
>This is soul destroying.
Why?
the dotcom bubble bursting didn't mean the internet wasn't an extremely valuable technology - still a bubble
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
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.
I didn't think it was possible for Vercel to get more expensive, but I guess we're going to find out.
> 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.
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?
Often they do not actually sell you hardware servers, but VMs running on them, with designated properties.
I agree but this is not only easy to tell, you also specify when you buy AFAIK.
You either buy VPS or bare metal servers.
Hetzner do both.. well rent, not sell, afaik
I ment selling time-shares, so yeah rent.
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.
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.
Thanks. Looks like I misremembered the formula. We run way lower than 2. I have seen some systems running with 1.0x values (I don't remember the exact value).
However, this doesn't mean that the increase in energy costs are not affecting Hetzner.
Even existing hardware can fail, and swapping out memory or disks is expensive these days. :-(
Variable costs increase ? (Floor space rental, Energy, Salaries, licenses, other services ...)
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
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
For out 30-40% increase in infra would crucify some companies!
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.
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 have a "server auction" system. Thankfully price increase for these is limited to 3%.
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
Nice, so we finally know who's actually paying the costs for the AI boom, while the returns go exclusively to the scamers.
Well, €1,20 increase isn't going to break it.
Does that mean they will upgrade the fleet? Can we get AMD Turin across the board? US cloud has been lacking.
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.
I guess it's just a bad translation and means IT sector. German word: "IT-Branche"
Hi there, That's actually my bad. I'm a native speaker, but I've lived in Germany too long apparently. Thanks for bringing it to my attention. --Katie
Seems poor translation. The German version only speaks about rising costs in various areas, no mention of any IT branch. They probably meant the whole IT market in general, not specifically their own company or some branch of it.
It's a German hosting company making a translation error from the German "IT-Branche". The wording doesn't appear in the German version, but very well could have at some point in the process.
yes, "IT-Branche" means "the IT industry"
Thats just what we call it in Germany.. It's still a bit of backwater when it comes to some aspects of tech haha
I understand it as "the branch we're purchasing/hiring from", not the inner part of the company.
this should be the link instead. @dang
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...
Presumably cost of hardware has increased due to ram and disk shortages, and they have to pass that on at some point.
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.
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
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!
uh oh
Hetzner has proven yet again that they never could be trusted, that they will betray their customer. A 30-40% increase is not justified by any other cloud. There are plenty of low-cost small clouds one can use, ones that won't screw you over with such a price hike or other surprises.
Competing on price never lasts.