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
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.
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.
https://docs.hetzner.com/general/infrastructure-and-availabi...
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.
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.
And no, that doesn't make me some kind of "AI hater", or someone unable to see value in LLMs.
There’s a reason the term AGI is used a lot now. What are LLMs if not intelligence that is artificial? Just today I used it to debug code, write a shader (which, to be fair, it’s only slightly better than me at doing), and tell my daughter and I what hedgehogs and foxes eat. Seems pretty intelligent to me.
Of course, not long ago we were using the term largely for things that were basically big chains of conditional statements.
> Seems pretty intelligent to me.
Convenient? Yes. Intelligent? I mean, you can redefine AI to be whatever you want by lowering this bar however low you want. LLMs gave us slightly more convincing chatbots than prev-gen and nobody then would call them intelligent. The only reason we do now is marketing. It's laughable to me that we are still calling that something that's so obviously unable to push back on trivially impossible requests.
> Of course, not long ago we were using the term largely for things that were basically big chains of conditional statements.
No, we weren't? What are you even talking about? We had already built large-enough artificial neural networks whose outcomes couldn't be trivially explained in the 70's. Nobody with a sane mind and an understanding of what they were would call them oracles or intelligent devices. That's where the true genius of Altman lies.
In the academic fields where this taxonomy matters, nothing much has changed with LLMs, or not more than with DNNs, SVMs, etc. Nobody that's been involved in ML research for more than 5 years seriously thinks "job's done pals, we got to pack it up, after 70 or so years of effort, we've finally figured it out, and that AI we were looking for, we got it".
I suspect Alan Turing would also have disagreed with you, but to my knowledge he didn't actually use the precise words "artificial intelligence" so maybe we can disregard him.
But hey, your definition is much better established, right?
What you're proposing is in fact a brand new definition of AI. There are terms in use to describe what you want, AGI and ASI for example are more in that direction.
I don't like this manner of baselessly singling me out. Once again, there is no "my definition" of AI. Here is the one from wikipedia, that matches the academic definition with which I am aligned "It is a field of research in computer science that develops and studies methods and software that enable machines to perceive their environment and use learning and intelligence to take actions that maximize their chances of achieving defined goals."
My whole point is that the current AI-craze boils down to one single highly-specific method that got added the AI toolbox. It has clear shortcomings and limitations that major tech corporations hide or disguise knowingly, for their profit and our own deception. My take is that we collectively benefit from calling the current breed of AI products what they are: LLMs. For transparency's, correctness' and honesty toward consumers' sakes. The marketing around those products needs to be regulated accordingly.
Now I want to elaborate on why the commonly used taxonomy of AI, as formalised by scientists, or, what you call "my definition" is the only one that matters (with the practical consequence that nobody in the field uses the term "AI" without more qualifiers). Say, you develop a program to play tic-tac-toe. It is something whose complexity is low-enough that it has an analytical solution, with all the states of the game that can be stored and look-up. It could also be trained via convolutional neural networks, a family within machine learning, within AI, on lots of games. Would you call the resulting capability of playing tic-tac-toe "AI"? Theoretically yes, you must (and myself as well). Where we differ is in the importance of specifying how this ability is accomplished. The analytical implementation will be fully explainable, while the neural-network won't. In other words, we won't be able to tell whether the answer from the latter is faithful and desired, or subject to what we nowadays call "hallucination" in a turn of the tech giants to further anthropomorphise LLMs.
Now, maybe more about where I'm coming from. I researched computer vision algorithms for self-driving vehicles for several years. The trolley dilemma and other considerations about what it means for machines to behave "morally" has been ingrained through my formative and academic years. As Engineers and machine learning scientists, we have been evolving our field from predictable analytical methods to new ones with better results but less introspectability. I'm of the standpoint that this is only fine as long as the society is educated on those matters and willingly commits to using those methods with there trade-offs, for about the same reasons we put labels on food products and list known side-effects and their occurring changes in our medication. Because now those computational methods affect us in the real world in very material and tangible manners.
That ship has sailed, you're the one who has to adapt to the usage of the word in the world, not the world to you.
“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.”
(I also prefer comments that are clear without insinuations).
Clarity > Cleverness2. Trump is making everyone scared to use US hosting.
So they're leveraging for extra profits.
"No meaningful European competition" might be a bit too strong. There are many great EU hosters. OVH, Netcup, Scaleway, Strato, Ionos, Exoscale, to name a few. But Hetzner is probably the biggest and has the best name recognition. Doesn't hurt that their prices are among the best in the industry
Revenue (EUR): Ionos 1.5bn, OVH 1bn, Hetzner 0.5bn, Strato <0.2bn, Netcup (incl. parent) <0.1bn, Scaleway <0.1bn, Exoscale <0.01bn
We are tied to American economy and if AI companies start driving prices up not only DRAM but basically everything will become more expensive.
https://www.micron.com/us-expansion/id
> Micron has already achieved key construction milestones on its first Idaho fab with DRAM output scheduled to begin in 2027.
https://investors.micron.com/news-releases/news-release-deta...
> Production is expected to start in 2030 with the fabs ramping throughout the decade.
Until they start outputting DRAM in any meaningful quantity, they're not relevant.
According to wikipedia Micron Fab 6 in Virginia started production in 1997 and is still operating
Building a factory is one thing, they can have 50 of them built, but that doesn't mean much if all 50 together amount to like 0.1% of the company's output.
Once those factories scale up to 1-2%, then we can start considering that they've actually built a domestic supply, but that's a whole different goal than simply building the factories. Building factories is trivial. Making them output something is also "trivial". Scaling that up to a meaningful amount is a whole different, much harder goal to accomplish.
Say you use a magic wand and build 15 new state-of-the-art factories tomorrow. Who's gonna run them? Does any location in the US have enough qualified workers that can simply take over and produce RAM in them from day 1 with no major fuckups?
No, you need a ton of time to teach thousands of people how to run those 15 factories. To even begin to teach people, you need to have 1 factory up and running. That 1 factory is at first going to be run by some of their existent workforce that they temporarily migrate from South Asia. Only then can they start to teach local populace how to run those factories on their own.
This is why it's much cheaper to simply build an additional one in South Asia than it is to build more than one in a whole new location. South Asia already has a bunch of workers that know what they're doing because they've been doing it for a long time. Build a new factory, promote some of your existent workforce up the chain, fill the lowest positions with fresh graduates that are gonna be equally good every year and you're good to go. It's nowhere near that simple in a brand new location, where even the most optimistic scenario would take longer than a decade to produce a meaningful amount of output.
There is also https://www.vishay.com/ which expanded several sites in .de, without much fuss, or begging for subsidies. That is neither RAM, HBM, NAND, nor NOR, but nonetheless much needed stuff, for all the electrified cyber.
They make DRAM for cars, not computers, in the USA. They've promised they'll bring manufacturing onshore any time soon, which effectively means they'll wait until Trump forgets about it.
0: https://www.nist.gov/news-events/news/2025/06/president-trum...
Where do you get your information from?
DOGE cut basically all staff from the CHIPS Program Office, congress passed the money but Trump is choosing to turn it into a slush-fund the admin spends on industrial policy (such as buying a stake in Intel). Wolfspeed went into bankruptcy in part because the admin delayed CHIPS funding agreed by the previous admin [1] (it's unclear whether they received the grant now that they have left it).
[1] https://www.ft.com/content/4aac09f9-19df-401a-9ab3-ef14a47bb...
https://wtop.com/government/2025/11/doge-quietly-disbands-8-...
What's the state of your house now?
This is news to a lot of Americans! The 2022 CHIPS and Science Act is codified federal law. I think a lot of states (Arizona, Idaho, New York) would be very interested to learn that the funding for the infrastructure that they are already building has somehow gone poof.
Europe doesn't have local manufacturers. So it cannot exert control over the manufacturers to keep its internal / strategic market sane. All European hardware manufacturers have to put up with and compete in irrationality inflated prices.
This should have not been allowed to happen.
E.g., if I’m running a business in the US and I don’t kiss Trump’s ring (and pay bribes), if he becomes dictator for life in 2028, all bets are off for my business.
Both the EU and USA import the majority of their computer equipment, and the USA is placing heavy and unpredictable tariffs on those goods. It’s hard to argue that a business should bet that data centers will be cheaper in the US than in the EU if Trump is the last democratically elected president.
The most stable places to do business in 2026 are probably the EU and China.
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.
* 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...
> 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
> 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.
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 :)
Grocery prices have also stabilized but I’m still paying too much ha
The fact that it stabilized (at whatever price) and that suppliers aren't even thinking about ramping up production, should tell people that the doomers and gloomers were yet again over-reacting to things they don't fully understand themselves.
> Grocery prices have also stabilized but I’m still paying too much
I think that's a local problem, if you happen to live in a country that's trying to move over to isolationism rather than globalism as of late. In other modern countries the prices are also increasing, but at least following inflation somewhat so the increase doesn't seem as bad for us. Maybe at least yet? Who knows.
Ramping up production takes months and paying back the price to ramp up production takes years. Manufacturers have started investing in more production capacity but it'll take a while before supply can be sold off.
Based on interviews with industry professionals, I believe the forecast is that RAM prices will start going down again between August and the end of next year. Until then, prices will climb as stock depletes and RAM production is capped.
Where are you getting this from? Because that's not what I've seen, if anything the industry seems to lowering the production capacity, not increasing it.
And even if it takes years, if they thought it was a sustainable growth in demand, they'd at least be moving in that direction which again, doesn't seem to be happening.
> I believe the forecast is that RAM prices will start going down again between August and the end of next year. Until then, prices will climb as stock depletes and RAM production is capped.
You're already wrong with this today, prices stopped climbing already and have been stabilizing at the current prices... https://pcpartpicker.com/trends/price/memory/
https://www.trendforce.com/price/dram/dram_contract https://www.trendforce.com/price/dram/dram_spot
I don’t see this anywhere, source?
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.
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
Checking today doesn't really indicate anything.
It's worth noting that the hardware price of RAM is up at least 550% yoy, so this was always going to happen as soon as their existing contracts had to be renewed
I thought the "effective immediately" mean that April 1st threshold wasn't for the memory...
I suspect there are errors on their announcement anyway, I mean there are rows like this on it
GEX131 (256 GB RAM) 1232,05
GEX131 (512 GB RAM) 1230,82
GEX131 (768 GB RAM) 2114,75
Hetzner often feels more like a mom-and-pop store then a corporation because of stuff like that
"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.
What happens when an unstoppable force (building everything in Electron because hardware is cheap) meets an immovable object (oh no hardware is expensive now)?
Resource constraints have often helped me come up with stuff that I'm actually proud of.
A human doesn’t need 100TB of books to learn the alphabet.
A human does need 16ish hours per day of audio/video content for several years to learn the alphabet.
Living inside a normal home with my parents was enough for the audio part.
It was not meant as literally sitting at a screen with audio/video for 16 hours a day.
IOW, humans still learn more effectively with less information, because there are innate mechanisms which process this data continuously and extract new meanings from the same data. This is part of both intelligence and consciousness.
LLMs lack both.
> because there are innate mechanisms which process this data continuously and extract new meanings from the same data
To me, these statements strongly contradict each other, but I also really do not care enough to debate it.
Have a nice day.
Is that really the case? How much data is it for 4k video, high bitrate auditory, spacial mapping, internal and external nervous system, emotions, and a dataset to correlate all of these in time?
So, getting systems with higher RAM capacity is getting harder (from laptops to smartphones). So, for a couple of years, we need to stop using Electron so much and use what we have efficiently.
Data centers, esp. AI hyperscalers do not care about efficiency for now, because they can suffocate consumer-grade part of the hardware marketplace and get anything and everything they want. When their bubble pops, or the whole capacity ends, they need to learn to be efficient, too.
For reference, a well-optimized cluster runs at ~90% efficiency even though they have thousands of users. AI hyperscalers are not there. Maybe 60% efficient, at most. They waste a lot of resources to keep their momentum.
https://v-color.net/products/ddr5-ecc-oc-u-dimm-server-memor...
But they no longer have 6000mhz stuff in stock (which is ideal for Ryzen due to the 1 to 1 speed match to the memory controller).
It's frustrating :(
https://users.rust-lang.org/t/energy-consumption-in-programm...
Also, Typescript 5 times worse than Javascript? That doesn't really make sense, since they share the same runtime.
See this example as one demonstration: https://www.typescriptlang.org/play/?q=8#example/enums
The TS code looks very different from the JS code (which obviously is the point), but given that, not hard to imagine they have different runtime characteristics, especially for people who don't understand the inside and outs of JavaScript itself, and have only learned TypeScript.
One thing to consider, is that with JavaScript you put it in a .js file, point a HTML page at it, and that's it.
TypeScript uses a ton more than that, which would impact the amount of energy usage too, not to mention everything running the package registries and what not. Not sure if this is why the difference is bigger, as I haven't read the paper myself :)
But if you do, please do share what you find out about their methodology.
The resource consumption b/w rust and golang would be pretty minimal to figure out actually for most use cases imho.
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.
My argument is not that market is perfect but that the alternatives are probably far worse, like a new tax on a specific group of companies.
I am all ears for your examples though but I don’t think borders, leadership changes or advances are “this type of problem”
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.
That's my hypothesis I spent a whole of 30 seconds thinking about anyways.
> eventually washed over
Eventually is doing a lot of heavy lifting here. Several years of constrained supply have real consequences for people and businesses. Hardware manufacturers are saying most of their capacity is already sold out to AI customers through 2026, and possibly even through 2027 and 2028, with the rest of the markets getting what's left over. This is a fundamentally different market dynamic.
How is that different from today? The scale might be different, but it's quite literally a "supply/demand mismatch" right now.
I don't think what we're seeing today can be described as "structural", at least because it's way too short to make such proclamations today, if it ossifies, then yeah maybe I'd agree with you, it's become structural.
> Several years of constrained supply have real consequences for people and businesses
Indeed, but lets see if it'll go as far as being "several years", the prices already stopped increasing, and supply still isn't planned to be expanded, if either of those changes you might have a point, but as of today it seems like an exaggeration.
We wouldn't allow any amount of investor money to buy out essential utilities and then exploit their natural monopolies to charge the public 10x as much for access to water or electricity.
We wouldn't allow any amount of investor money to buy out all the companies that maintain our roads or rail networks and then charge 10x the established prices for maintaining that infrastructure.
We wouldn't allow any amount of investor money to buy out all the phone networks and then deny people access to communication because they didn't pay some exorbitant protection fee.
No-one thinks regulation of these markets and interference with these kinds of corporate transactions is a crazy idea. Why do so many people here apparently think we should let the funny money funded AI giants distort the entire global tech supply chain in the hope that their silly valuations won't come crashing down for a bit longer?
We can't afford to wait "several years" to see whether the invisible hand will fix the problem. The markets have already allowed this situation to develop over a period of several years. The damage is too severe and it's happening right now and it's getting worse. Governments need to start swinging the regulatory axe now.
... or their first bubble.
At the same time, the rational market is behaving rationally - they're not increasing production because they're fearing AI bubble could burst, leaving them with oversupply and expensive factories.
The market, apart from AI market, is behaving exactly as it's designed and as it should. But it doesn't mean outcome is good for everyone.
Nah. For decades software engineers have been more expensive than the cost of buying the extra hardware needed for vastly inefficient software. There are orders of magnitude of inefficiency there. So there's a ton of slack in the world's software that can be taken up by software engineers while hardware is scarce, pushing back the date where there will really be a problem probably by decades more.
Of course software engineers will see a problem though, because they'll have to learn to to write efficient software again.
ie. "Great, but now make it work with less RAM" will be a thing again, instead of "It needs more RAM so order some as it's cheaper than your time to fix the code".
The solution might have to be mandatory rationing of some kind to avoid a situation where only a handful of AI giants are able to buy essential components. We can't just throw the rest of the economy under a bus to support the AI bubble for a few more months.
I'm working with a business right now that would like to buy some new servers for sensible, boring business reasons. It is having trouble because the prices from their normal suppliers are now extremely high - if the components are even available at all. This business has nothing to do with AI or Big Tech and yet it's at risk of being unable to continue normal operations in much the same way that a business would be affected if the phone networks were all switched off or the water supply to its office was cut. We regulate those industries because their continued reasonable operation is essential to make sure everyone else can continue to operate reasonably as well.
I'm looking at the procurement sheet that I made for them a year ago. Half of the items are no longer available, while the other half became so expensive that we'd probably build 10 of such labs with these costs a year ago.
I'm also looking at my home NAS right now - I pray not even a plastic clip breaks inside, because I'd have to shut it down.
While these are still likely the first things that you'd think of being affected, I'm sure the effects are rippling through essentially every industry that utilizes these components in their supply chain. Which is probably - every industry nowadays?
Fwiw, the days of creating an good ol' reliable hosting provider/Vps provider are over. I looked extensively into it one time out of curiosity but this would be one of the worst times in history to do that.
We would be sort of stuck with the options that we have right now and more and more shops in Lowend are even shutting down or raising prices with the sheer ram crisis and even HDD and storage crisis now.
A provider in LET had a post which said, "what should we providers do to deal with the ram shortage/ram prices"
These providers gave competition/had different unique features too to have chosen them but they were also incredibly price sensitive and the AI bubble blew the sensitivity by raising the prices almost 5 times or more. This would impact real businesses.
Thank you for creating this comment. I hope more people can read this. I genuinely just want this bubble to burst asap so that we can see a sense of rationality back within the market/the market functioning as expected without the immense irrationality/unpredictability of future.
another point is this, from my hosting provider idea, I shut it down. Why? because it literally makes 0 sense to start now, its postponed indefinitely untill the bubble bursts/ram prices are decreased.
How many other projects might be going through something similar. Gck1's comment next to mine also gives an example of a project whose value of cost increased 10 times.
How many of such projects would simply be unable to be built because of the ram inflation can't be underestimated imo.
and forget people who wish to game and many other things too. Basic comodities in the previous year or two feel like luxury now. All because of AI. It's insane.
Absolutely VC money is flowing around but I think it’s unclear where the cards fall yet.
Not sure what you would regulate here. I hate the tripe that America and China are at war but I do think it’s not a great decision to stop the current work the west is doing as China is pushing full steam ahead.
This situation is harmful both economically and for basic quality of life. It is rational - and probably now necessary - for governments to intervene to counter the market distortion and ensure the continued availability of normal products to everyone else.
I am fully aware that the West regulating here would potentially undermine the VC investment model that these big tech firms are relying on. I have no problem with this. Business entities are legal fictions that we allow to exist for the benefit of real people. If the behaviour of those entities is harmful to real people - and I don't think anyone can credibly claim otherwise in this case - then it's time to change the rules they operate under.
What does this even mean? I know people on the internet sometimes exaggerate, but I cannot even begin to find a more charitable meaning with this, what exactly will be "destroyed" in "tech" because of prices going up for a year or two?
Then take a look at your bank statement to see what are the services you pay for monthly that also require the same hardware.
Now, imagine that these devices or services can no longer procure RAM, SSD or HDD. There's no more available supply for these components, because this is what's happening.
Would you still be able to have these devices if they all broke tomorrow? What about your hypothetical Backblaze subscription? Would you still be able to have an off-site backup?
Same with work -- I've just ordered some replacements for 13 year old servers in one office, but if it was more economical to repair them
Why would I imagine something so far out from what will realistically happen?
Again, a lot of doom and gloom over very unrealistic scenarios. Where are you even getting this from, YouTube channels?
Of course if there is no RAM or flash-storage at all available, eventually hardware will be unfeasible. But when we've experienced these sort of things before, it eventually restores to "normal" prices, and there absolutely nothing pointing to what we're experiencing now to get even worse, if anything it's already stabilized.
https://www.theverge.com/games/874196/valve-steam-machine-fr...
Regarding OP, I don’t think they implied this will last forever, but is definitely concerning.
> to destroy everything we know in tech
Valve (temporarily) increasing the pricing of yet-to-launch hardware wasn't where I thought we'd land at with my first comment, I somehow also have the feeling that that wasn't what GP had in mind either,.
That meme refers to speculation on stock market prices. Nobody is buying up RAM with the expectation of making speculative gains on it.
How would you propose solving it? My opinion is that government cannot solve the problem better than the market. That’s not to say the market is ideal or perfect but one of the better tools available. GPU prices might stay high for a number of years. I don’t think that is inherently bad. Constraints breed innovation and help guide market participants into the right direction.
I think folks often get hung up on the market thinking it’s a perfect tool or it will realign issues instantly. That’s not true. Demand is high, price catches up and eventually either that thesis behind the demand is correct and eventually supply increases or that thesis is proven wrong and demand collapses below original baseline.
Obviously that’s a simplified version of it above but I don’t know what folks like yourself are poking. How is a tax on hyperscalers effective? I suspect most folks repeat this idea because they are in the anti-AI camp. Should we tax EV manufacturers because they may be buying up battery supply? I don’t know if I want the government making those kind of decisions.
I don't know what the solution is since I'm not an economist, but I also don't have to be a pilot to declare someone fucked up when I see a helicopter on a tree.
EVs are a very tangible thing that are on the road, compare that with crypto and NFT which is ??????
Who are you to decide what is tangible and what is not? That’s my whole point. GPU prices are still not crazy on a $ / performance scale, especially if you do a rough chart of it over time. Certainly there are carve outs, the 5090 is still hard to get and charges $1k+ premium over msrp.
Maybe if you touched a bit of grass the answers to your outright gaslighting wouldn't be "inflammatory".
If that’s deranged wow I might not need to be the one touching grass. Let’s backup, you’re the one saying I am parroting. I asked you how you would solve it. You ignored that and went further down some hole of prices being imbalanced since 2012 and not being a pilot and then jumping to crypto and nft.
None of that is constructive. That’s not what gaslighting is. You’re going off on strange tangents and have yet to provide a solution to the problem. I already said it, the market is not perfect but it’s pretty good at solving these types of problems. If you have a better way I would love to hear it. I don’t believe arbitrarily taxing specific industries is a solution because there are always second order effects that you cannot plan for. And also who gets to decide who can buy equipment or not.
I am not policing you. Just pointing out this is not in the spirit of constructive dialogue and you should work on it! I am generally tired of folks like yourself not adding anything while raging that others need to touch grass. I noticed that’s a common insult with folks like yourself.
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.
I don’t know who will come out winners but I do agree that China did well taking the playbook from Singapore and navigating their country through incredible amounts of growth. They are still facing depressing housing prices and deflation in other parts of the economy.
There are absolutely areas where markets breakdown, thinking problems where impacts are on longer horizons but for simple supply and demand like what we are seeing today, things will sort out in a couple years.
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...
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...
Right now they're trying to avoid the other side of that coin (low value trap) by integrating vertically.
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.
What do you mean? I'm talking about the CCP funding projects to increase yield for their fabs, not buying GPUs from NVidia...
I'm very aware of that but it's commonly referred to as CCP which is understandable for any reader, I don't need to change it to CPC to be understood at all. Not sure why you insist on nitpicking this point, rather pointless, it's just a common way to refer to it.
https://en.wikipedia.org/wiki/Chinese_Communist_Party
Read the very first sentence.
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.
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
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.
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 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.
Considering how many politicians in congress are influenced by corporate lobbyists and AIPAC, I think the situation is much more bleak
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.
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.
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.
There is a reason for that...
Right now we are in the cheap phase.
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
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.
This is soul destroying. Literally made my day worse thinking about this.
This is my friends' lives.
That should make your day worse.
Why?
Nope, because the only companies making money on this bs are companies selling pickaxes and shovels
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.
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.
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.
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.
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.
no you aren't lmfao
Releasing the Hypnodrones is always a very satisfying milestone.
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.
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.
Also, like the parent said, they already charge ten times more.
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
Used to be every VPS refresh cycle you'd get more server for less money. This is miserable
In EU there are: Hetzner, OVH and Seeweb.
So increasing prices on existing cutomer hardware is what, subsidising hardware refreshes elsewhere in the datacenter?
You either buy VPS or bare metal servers.
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.
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.
However, this doesn't mean that the increase in energy costs are not affecting Hetzner.
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.
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.
I wonder how many of Hetzner's customers are like me. I hope DRAM doesn't kill off cheap VPS providers like this one.
At least where I live there’s a stupid amount of red tape for these things.
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.
You should be able to do this hassle free, and you probably can get away with it, but you may find yourself in a grey area later.
It's just one of many types of red tape that stiffles innovation.
It actually is in some jurisdictions, even if of course no one cares (except of course insurances looking for reasons to refuse a claim).
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.
If you just want to pilot a 747, drive your car really fast at a skate ramp.
A 747 is overkill for a fetching some groceries..
https://www.reddit.com/r/OVHcloud/comments/1ra5jzg/ovh_doubl...
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.
Hopefully this also means new providers appear in Europe, to handle the increase in demand.
Announcement page: http://docs.hetzner.com/de/general/infrastructure-and-availa...
Pricing page: https://www.hetzner.com/cloud/
Product previous price €3.95 New price as of 1 April 2026 €5.39 CX22 (HEL1) all prices incl. 20% vat
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.
Memory is going up for everyone, dude. And the people moving to Hetzner aren't exiting US clouds to leave for chinese ones.
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.
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".
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.
CPX31 Cloud Server (Germany): €13.10 → €13.99/month (+€0.89, ~+6.8%) BX21 Storage Box: Unchanged Primary IPv4: Stays at €0.50/month
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
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.
What's behind the European push?
Obviously the US pushing absolutely everyone away and making EU and Europe the new enemy, so now we here want to reciprocate that and feel the need to move away from US infrastructure ASAP.
Personally I've been on a personal quest to minimize my usage of US-based services for many years already, but right now it's even part of the mainstream conversations, so seems to be ramping up, finally.
Personally I do it because it's better aligned with what kind of future I want, and not wanting to support hyper-captalism environments anymore.
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
Not sure who "we" is, but I highly doubt you'll use those servers for 15-20 years.
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
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?
> Unfortunately, we are forced to increase the prices on these Server Auction models [...] old price 37.60 Euro -> 59.29 Euro, comes into effect 2022-03-03
Citing raising energy prices at that time.
Yes, in 2022 I was an existing customers, and my server increased in price then, the server affected at that point went from 37.60 Euro to 59.29 Euro. Today that same server went from 65.22 to 67.18, so there is even more price increases seemingly between today and 2022 but I'm not finding exactly when that was.
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.
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.
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)
Previous price: € 31.90
New price as of 1 April 2026: € 32.86
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.
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.
Anyway, let's all please pretend that Hetzner is now way overpriced if anyone asks about it. :P
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?
I think it's RAM and server prices globally shooting up. Extreme RAM shortage and increasing hoarding of all types of hardware supplies.
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.
$0.60 will be added for the IPv4.
Is the price hike only on Hetzner's offer for dedicated or VPS servers?
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 %
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....
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?
> 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 ?
Edit :Yes, it seems your right, I should have checked,
> Support services replacement of defective hardware
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.
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.
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.
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 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.
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.
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.
Oh it's this thoroughly debunked talking point again.
https://andymasley.substack.com/p/the-ai-water-issue-is-fake
[1] - Cooling towers reject heat through evaporation, which uses water, not just recirculates it. Evaporated water is lost to the atmosphere and must be replaced with "make-up" water. As a result, recirculating cooling loops still require new water input to make up evaporation and blowdown losses.
What if there were a cooler that somehow didn't evaporate water, you might even call it a "dry cooler" - that would be a sweet invention. This might even be required in areas where adiabatic cooling isn't effective (humid climates)!
I like the idea of a giant heat pump into the ground, but heat exchangers are expensive and so is digging.
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.
That's not where the interesting discussion is. The interesting discussion is with the notion that free unregulated markets are universally good and will naturally lead to positive outcomes because... I don't know, I'm personally not religious, but somebody here will help me :-).
This lead to low prices and/or differentiation with new products.
Most of these markets were too good, so in general we now have a few big companies buying up the lion share of the supply so they can set the price regardless. For example soy, just to name one
My point is that it's not a real market economy if the risk premium -- and in China's case, the exchange rate -- is rigged. And it has been, since the 90s.
EDIT: For clarity, I'm agreeing with you, since you were being facetious.
The right way of looking at it is, there was tiny little interlude of something vaguely approaching the free market -- back when Volcker was in charge.
The textbook desirable outcome is that competitive markets minimize suppliers'surplus which is good for consumers.
Not that this doesn't mean unregulated markets. Monopolies and oligopolies acting like a monopoly are textbook examples of pathological markets where suppliers can maximize their surplus.
I think pretty much everyone would agree that the current situation is a failure of regulation not over regulation. Regulator and legislation have been constantly weakened in the name of international competitiveness since Reagan.
That's one form of trading with your neighbor.
This is actually also how global diplomacy works. Either have big guns or big friends.
For markets to exist, property rights also need to be respected.
For markets to exist they indeed need to be regulated and when they aren't you get something other than a market, you get thuggery.
I'm not convinced that the system they want to build would actually protect people, though.
Edit: upvoted because it's true
Trivially, I would assume proponents of "free market" and "fair market" are a tiny if not zero Venn diagram, and that terms are at least somewhat opposing, but will withhold my judgement :-).
They are responding to the market. If they overbuy then they will lose money and have to sell at a loss, at which point you could snap up some good deals.
The funds themselves say in their financials that they view housing as profitable because of the various restrictions on supply in every desirable city. They explicitly say that if those restrictions were lifted they would not be able to make money in that business and they would exit.
Or to convert them into apartment buildings
That said, nothing about the situation you described is at odds with “free market”. You’re describing the operation of a free market.
I think a lot of people want “free market” to mean the opposite: A highly restricted market where they are protected from any supply and demand inputs from anyone else. They just want cheap things and don’t want to compete with anyone.
There are two sides to a free market, though. In your example where a hedge fund comes in and buys your entire neighborhood, they would have to do so by outbidding everyone. This drives up the price. If it’s an economically irrational move you’d be smart to sell your house to them at an inflated rate, too! Then move back in when the prices crash down.
So dont see this reply as a justification. Just as a note that you failed to do basic diligence on distortions that are well known. And as I said, that are not relevant to the analogy.
"When Wall Street Is Your Landlord" - https://www.theatlantic.com/technology/archive/2019/02/singl...
"In one Atlanta zip code, they bought almost 90 percent of the 7,500 homes sold between January 2011 and June 2012"
You are confusing market outcome with market structure.
Nobody is making an artificial scarcity. They’re producing as much as they can.
You can buy the exact same DRAM that the data centers are bidding on.
> 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.
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.
There are many horrible things in the world and we don’t need to label them all as a “tax.” If we use words in an imprecise way, it obfuscates the truth.
Projections show $14-20 billion in losses for OpenAI expected just in 2026.
The chances that someone is not going to ask for a debt write-off approaches zero as the years go. OpenAI already began testing the waters since late last year. Senator Warren has already raised alarms about potential indirect taxpayer exposure when the "AI bubble" bursts.
When that happens - and it is all but guaranteed to happen - it will amount to a horrendous tax, rendering everything you’ve said about 'imprecise words obfuscating the truth' complete hogwash.
The monopsony (single buyer of a good) equivalent of an oligopoly?
Phew, it is a word, but not a highly studied one!
This is actually a clean commodity price spike because it’s specifically not for market manipulation or financial engineering. It’s because demand for this product really did explode overnight.
Based on how the same 3 billion has been circiling between Anthropic, OpenAI, Nvidia, Google, Microsoft, Amazon, and a few other companies... I really doubt that this is the case, to be honest.
Weird hill..
https://en.wikipedia.org/wiki/Demand_shock
Tax is also an economic term, which is not what’s happening. Calling it a “tax on consumers” doesn’t make sense because any data centers buying RAM right now are also buying from the same global market.
If commenters just want to be outraged and throw words around then use whatever words you want, I suppose.
Economic history is also full of examples of bubble bursts.
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.
OpenAI brazenly used their market position to create artificial scarcity. That's not normal market behavior. That's manipulation. And now we all suffer.
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.
Sounds like not stressing the electricity infrastructure in Spain, to run inference for Facebook North American posts, should be seen as a positive...
A key element is that China still acts as a block.. So Chinese firms have lost a big opportunity by not making DDR4 yet aren't ready with DDR5. When they are ready it will probably tank the market which is less profitable than selling at high prices with actual availability of something the whole time.
The past 6 years of GPU pricing (the 5080 launched at $1000, currently $1500-1800 at Microcenter) don't exactly fill me with confidence that RAM manufacturers will increase supply to meet demand and bring down prices again.
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.
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.
I think the problem is that both the buyers and producers are too large. Governments should not allow companies to become this big, because... <gestures broadly at everything>. If there were a thousand ram makers and a thousand datacenter builders, this particular problem would not exist.
But you can't just label any price evolution you dislike as "price manipulation".
Their size and the effect on the market they have
>×If 5 companies want to buy a quadrilion ram chips to build datacenters, why is this manipulation moreso than a million companies each wanting to buy 100 ram chips?
Because they are 5 companies, especially when it can be shown they work in unison (formed a cartel)
This is one of the many flaws of badly regulated markets.
(There are no free markets, and there is never perfect information, and people often behave remarkably irrationally for many reasons.)
Remember when FAANG was caught red handed manipulated hiring to depress salaries?
Just seems like a lot of astroturf-ish behavior ignoring real world happenings: https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
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It's interesting how little you've examined similar cases. And you some how assume good faith in their behaviors.
- 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.
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.
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.
But then I remembered that what AWS gives you is the same generation of CPU, just obfuscated.
GCP Also obfuscates it, but not as much: https://docs.cloud.google.com/compute/docs/general-purpose-m...
(note: skylake is 10 years old)
Coincidentally so are the t3 / t3a instances on AWS that everyone loves to use especially for dev/staging environments
Not necessarily obvious failures, but subtle errors, memory problems (like this case without an ECC capable CPU) and little instabilities.
With cloud instances I can migrate to a new instance with a couple clicks if I want.
Trying to save a couple hundred euros per month on hosting costs needs to be balanced against the risks and extra developer time.
For personal projects these old instances can be an excellent deal though.
Also, if you don't want to provision software systems, you probably shouldn't use Kubernetes at all. Both this and compute are niche businesses and neither would rent a budget server anyway.
6700 should be DDR4 unless they're using some weird-ass setup.
https://cloud.google.com/products/calculator?dl=CjhDaVEyWWpJ...
The CPU is the same generation; https://docs.cloud.google.com/compute/docs/general-purpose-m...
Depending on workload, this old CPU might be as slow as a 2 thread or even 1 thread current gen server.
Because those big systems are optimized for power efficiency. That Epyc is ~2.4W/core compared to ~16W/core for the old i7. It has a lower base clock and is Zen5c. If we cut the 8-core Ryzen 9850X3D's score in half, 4 Ryzen cores from the same generation but with a higher base clock and six times the L3 cache per core would be 20942. But it's also back up to 15W/core. The Epyc still has better performance per watt.
The newer cores are significantly more efficient. That doesn't mean they're unconditionally faster independent of all other variables.
I think you’re talking about something else. The comment above was about a machine that didn’t have 10TB of storage, 320GB RAM, or unlimited bandwidth.
If you find 320GB of RAM and unlimited bandwidth for 40 Euro monthly then send it over!
This is a rather baffling opinion to have. All cloud providers charge far more for a virtualized instance running on God knows what hardware. You are faced with a deal where you can run your software on bare metal, and you complain about... About what exactly?
Not too bad considering.
The cheapest Kimsufi dedicated server with 32GB ram is $11.10/mo.
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.
That's exactly normal market dynamics during acute shortage. Remember 2020 when filtering face masks went up in price 10-100x?
It is, in fact, normal market dynamics.
https://en.wikipedia.org/wiki/Cornering_the_market#Thales_of...
CVS Caremark, Express Scripts, and OptumRx manage over 80% of all prescriptions in the U.S
Amazon buys 50% of all books.
These examples are even more extreme than at least 3 major clouds present in the US buying hardware.
I don't think OpenAI purchase even comes even close to any of these.
And if you are going to protest with the common "OpenAI doesn't even build datacenters themselves!", yes, they don't, and it's a complete non-sequitur.
It doesn't matter how many companies are in this market, it takes a real amount of time to add capacity.
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.
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.
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.
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.
Is it even physically possible to deliver at a significantly lower cost? Pizza ovens are both very large and very heavy, you can't fit many of them in a vehicle. They're also tricky to load and unload.
Ummmm. No.
It means the United Nations Universal Post Union international treaties which effectively provide China with subsidised postage TO THE WORLD (as China is a "developing country") needs urgently updating....... Some of the postage you pay to send parcels within the boarders of your own country is used to subsidise crap posted from China.
Look at how The Hut Group handles logistics for MyProtein for example.
That's not reasonable condition, hence why EU is systemically more expensive.
THG logistics looks like warehouse->dispatch, i.e. it's for vendors of certain size that can prestock at regional warehouse. Private last mile always fast. But it doesn't address first mile to hub. Can a bumfuck workshop in a hamlet deliver in Greece deliver to warehouse in Poland across multiple jurisdictions for peanuts? My understanding is EU first mile is fragmented/slow if you rely on national post and expensive if you rely on private couriers.
PRC has unified mainland logistics, any sized vendor can get any standard sized item, in any quantity and PRC first mile logistics like Cainiao and JD will consolidate for cheap bulk (air)freight to regional hub where last mile is also fast.
PRC mainland->overseas complex is a system with low first mile + low last mile. EU has no integrated cheap first-mile, which raises price on SMEs, i.e. most of producers.
Yes, unless they're doing so at a ludicrously small scale. Sending a 20t lorry load from Thessaloniki to Warsaw will cost less than 6000 euros. I suspect it can be done for around 2400, but I don't know the route very well.
>My understanding is EU first mile is fragmented/slow if you rely on national post and expensive if you rely on private couriers.
Yes, it sucks at ultra-small scale. But that's really what that is. The private couriers have super attractive volume pricing, even 80% off public (consumer facing) rates isn't unusual.
China has an enormous leg wrt shipping.