Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!


Shells Virtual Desktop
BMail.ag - Secure Email Service
Server.net
CPLicense.net
VPS Server
Buy VPN
Vultr
VMs for AI
HostDare
HostDare
ReliableSite White-Label Dedicated Hosting for Resellers
25% Recurring Discount on NVMe VPS
InterServer VPS
BMail.ag - Secure Email Service
Best VPN
High-Performance Bare Metal Server Solutions
Karvl.com
Server Mania Cloud Hosting
DataWagon Hosting
AlphaVPS Hosting
Evoxt.com
Clouvider
VPS Hosting with NVMe
Residential IPs in the US & 4G Mobile Proxies in EU & US with Unlimited Bandwidth
ReliableSite White-Label Dedicated Hosting for Resellers
Rabisu - Hosting Solutions
Shells Virtual Desktop
New on LowEndTalk? Please Register and read our Community Rules.

All new Registrations are manually reviewed and approved, so a short delay after registration may occur before your account becomes active.

Hetzner Price Increase

1235

Comments

  • @DataRecovery said:

    @gdarko said: almost 500% price increase

    Das ist zu teuer!

    Ja, viel zu teuer.

    As someone said above they are actively engaging into a more high-end market, a market populated by heavyweights, I'm not so sure they'll be able to win a fight against such powerful opponents.

    Thanked by 2emgh DataRecovery
  • amarcamarc Veteran

    @WhiteRoseG said: I completely moved to IONOS 2 year contract saved 75% of my cost.

    How do you like it ? Which location, package ? Any YABS ?

  • MevspaceMevspace Member, Patron Provider
    edited June 18

    This wasn't on our 2026 bingo card.
    If anyone is looking for a new home for their workloads, we're happy to help with the move - mevspace.com B)

    Thanked by 1mans_xd
  • RurikoRuriko Member

    @HostDZire said: Well looks like right time to post another thread with leaseweb vps offers

    I shall be waiting for your new sales thread :)

  • DS26DS26 Member
    edited June 19

    Can anyone running a DC and selling dedicated servers comment on whether these price rises are to be expected across the board? I've got some servers I don't need but I'm nervous to let them go given they're on relatively cheap pricing.

    Eg I would consider this my worst value auction server and I don't really need it currently but I'm worried I won't be able to get something with same NVME for similar price:
    Xeon Gold 5412u
    128gb RAM
    3x 3.84TB NVME
    190 euros/mo

  • gremeyergremeyer Member

    @DS26 said:
    Can anyone running a DC and selling dedicated servers comment on whether these price rises are to be expected across the board? I've got some servers I don't need but I'm nervous to let them go given they're on relatively cheap pricing.

    Eg I would consider this my worst value auction server and I don't really need it currently but I'm worried I won't be able to get something with same NVME for similar price:
    Xeon Gold 5412u
    128gb RAM
    3x 3.84TB NVME
    190 euros/mo

    It only applies to new orders for now.

  • DS26DS26 Member

    @gremeyer said:

    @DS26 said:
    Can anyone running a DC and selling dedicated servers comment on whether these price rises are to be expected across the board? I've got some servers I don't need but I'm nervous to let them go given they're on relatively cheap pricing.

    Eg I would consider this my worst value auction server and I don't really need it currently but I'm worried I won't be able to get something with same NVME for similar price:
    Xeon Gold 5412u
    128gb RAM
    3x 3.84TB NVME
    190 euros/mo

    It only applies to new orders for now.

    My question is more whether we can expect similar price rises across the industry for new services, so I know whether to hold older services I have but could let go. Hetzner's statement seems to suggest that they expect the industry to align to their prices. Personally I don't see RAM and NVME prices coming down in the short to medium term, hopefully it's also not going up much more either, but are the kind of prices we are seeing from hertzner now really what is needed to cover current hardware prices?

  • @DS26 said:
    Can anyone running a DC and selling dedicated servers comment on whether these price rises are to be expected across the board? I've got some servers I don't need but I'm nervous to let them go given they're on relatively cheap pricing.

    Eg I would consider this my worst value auction server and I don't really need it currently but I'm worried I won't be able to get something with same NVME for similar price:
    Xeon Gold 5412u
    128gb RAM
    3x 3.84TB NVME
    190 euros/mo

    Keep it if I were you.

  • to replace my hetzner cx23 i got the leaseweb 1 x 4 vCPU - 6 GB vRAM - 100 GB NVMe Disk 2 years contract 2 years billing for 2.79€ / month

    are there similar offers from big providers?

    Thanked by 1emgh
  • gdarkogdarko Member

    @Samoht999 said:
    to replace my hetzner cx23 i got the leaseweb 1 x 4 vCPU - 6 GB vRAM - 100 GB NVMe Disk 2 years contract 2 years billing for 2.79€ / month

    are there similar offers from big providers?

    YABS or didn't happened

  • emghemgh Member, Megathread Squad

    @Samoht999 said:
    to replace my hetzner cx23 i got the leaseweb 1 x 4 vCPU - 6 GB vRAM - 100 GB NVMe Disk 2 years contract 2 years billing for 2.79€ / month

    are there similar offers from big providers?

    Leaseweb is a big provider tbh

  • Samoht999Samoht999 Member
    edited June 20

    @emgh said:

    @Samoht999 said:
    to replace my hetzner cx23 i got the leaseweb 1 x 4 vCPU - 6 GB vRAM - 100 GB NVMe Disk 2 years contract 2 years billing for 2.79€ / month

    are there similar offers from big providers?

    Leaseweb is a big provider tbh

    Yes besides leaseweb
    I have two piko netcup but this leaseweb is even more convenient comparing performance

    Thanked by 1emgh
  • @onidel said:

    @JerryHou said:
    everything is up except my salary.

    and onidel vps price ;)

    Bring a $99/year dedi in APAC please

  • fiberstatefiberstate Member, Patron Provider
    edited June 20

    @DS26 said:

    @gremeyer said:

    @DS26 said:
    Can anyone running a DC and selling dedicated servers comment on whether these price rises are to be expected across the board? I've got some servers I don't need but I'm nervous to let them go given they're on relatively cheap pricing.

    Eg I would consider this my worst value auction server and I don't really need it currently but I'm worried I won't be able to get something with same NVME for similar price:
    Xeon Gold 5412u
    128gb RAM
    3x 3.84TB NVME
    190 euros/mo

    It only applies to new orders for now.

    My question is more whether we can expect similar price rises across the industry for new services, so I know whether to hold older services I have but could let go. Hetzner's statement seems to suggest that they expect the industry to align to their prices. Personally I don't see RAM and NVME prices coming down in the short to medium term, hopefully it's also not going up much more either, but are the kind of prices we are seeing from hertzner now really what is needed to cover current hardware prices?

    Absolutely keep a server if it’s at a good price. It’s only expected to get worse from here. Everything is through the roof: electricity, real estate, space availability, and of course hardware, which is up 500% with little to no availability, even if you’re willing to accept an absurd price increase and wait six months or more for delivery from manufacturers.

    32 GB DDR5 ECC memory is now $1,850 per chip, and most vendors have only a few in stock at any given time.

    For everyone saying AI demand is a bubble, ask yourself how much AI has already integrated into the internet ecosystem. Now add medical, vehicle, and robotics control to the equation, and in 5–10 years, data center and compute infrastructure will continue to be among the most in-demand sectors the world has ever seen. Compute is a commodity, just like oil or anything else.

    Will new manufacturing capacity come online and alleviate some of this crunch? Sure. But demand will continue, and in many cases, it will outpace manufacturing capacity for the foreseeable future. Compute has always greatly benefited from scale. AI inference will absolutely drive cloud demand to dizzying new heights.

    Utilities are refusing Data Center interconnects due to grid constraints, water rights are being heavily fought over, industrial electricians are in high demand and most new data center space is focused solely on hyper scale.

  • mpkossenmpkossen Member

    @fiberstate said:
    Absolutely keep a server if it’s at a good price. It’s only expected to get worse from here. Everything is through the roof: electricity, real estate, space availability, and, of course, hardware, which is up 500% with little to no availability, even if you’re willing to accept an absurd price increase and wait six months or more for delivery from manufacturers.

    32 GB DDR5 ECC memory is now $1,850 per chip, and most vendors have only a few in stock at any given time.

    For everyone saying AI demand is a bubble, ask yourself how much AI has already integrated into the internet ecosystem. Now add medical, vehicle, and robotics control to the equation, and in 5–10 years, data center and compute infrastructure will continue to be among the most in-demand sectors the world has ever seen. Compute is a commodity, just like oil or anything else.

    Will new manufacturing capacity come online and alleviate some of this crunch? Sure. But demand will continue, and in many cases, it will outpace manufacturing capacity for the foreseeable future.

    People are saying there's an AI bubble not because AI isn't providing value. It's because none of the AI majors are profitable yet. Some of them don't even have a path to profitability. Yet more and more money is being dumped on it, with cost driven up because of high demand. A whole bunch of these smaller companies, and perhaps even some of the majors, will start BK-ing at one point. This will ease pressure on the market.

    The other thing that will likely happen is that when companies will have to start paying the real price for AI, they will be much more restrained and selective with its usage. This will also cool demand. Token maxing is already on its return because of how much it costs, and that's while AI is being offered at like a 90% (or higher) discount right now.

    As for Hetzner, I doubt this is just a cost-related increase. I think they also simple want to make more money and aligned their pricing with the big boys (Akamai, DO, Vultr, etc.). And they're free to do so. But personally, I've never seen Hetzner as an A-tier provider, so I will not be spending A-tier money on them.

  • fiberstatefiberstate Member, Patron Provider

    @mpkossen said:

    @fiberstate said:
    Absolutely keep a server if it’s at a good price. It’s only expected to get worse from here. Everything is through the roof: electricity, real estate, space availability, and, of course, hardware, which is up 500% with little to no availability, even if you’re willing to accept an absurd price increase and wait six months or more for delivery from manufacturers.

    32 GB DDR5 ECC memory is now $1,850 per chip, and most vendors have only a few in stock at any given time.

    For everyone saying AI demand is a bubble, ask yourself how much AI has already integrated into the internet ecosystem. Now add medical, vehicle, and robotics control to the equation, and in 5–10 years, data center and compute infrastructure will continue to be among the most in-demand sectors the world has ever seen. Compute is a commodity, just like oil or anything else.

    Will new manufacturing capacity come online and alleviate some of this crunch? Sure. But demand will continue, and in many cases, it will outpace manufacturing capacity for the foreseeable future.

    People are saying there's an AI bubble not because AI isn't providing value. It's because none of the AI majors are profitable yet. Some of them don't even have a path to profitability. Yet more and more money is being dumped on it, with cost driven up because of high demand. A whole bunch of these smaller companies, and perhaps even some of the majors, will start BK-ing at one point. This will ease pressure on the market.

    Yet every single Internet behemoth started in a arguably non-profitable way, Google, Facebook, etc. and all found ways to mega profits by absorbing an important industries market share. AI will automate everything, whats the value on that?

    The other thing that will likely happen is that when companies will have to start paying the real price for AI, they will be much more restrained and selective with its usage. This will also cool demand. Token maxing is already on its return because of how much it costs, and that's while AI is being offered at like a 90% (or higher) discount right now.

    Sure, there will be an equilibrium to be found in service cost, but the demand will not go away.

    As for Hetzner, I doubt this is just a cost-related increase. I think they also simple want to make more money and aligned their pricing with the big boys (Akamai, DO, Vultr, etc.). And they're free to do so. But personally, I've never seen Hetzner as an A-tier provider, so I will not be spending A-tier money on them.

    Cost of operations of this industry have in every aspect increased, it will be passed on to the consumer if any provider wants to stay in business. All we're saying is, if you have a well priced service that works for you now, hold on to it.

  • emghemgh Member, Megathread Squad

    The question isn’t if AI will have demand, its if investors will find the level of demand (and in time, profitability) enough to find decent ROI in the huge investments being made.

    That AI will be huge is priced in, everyone knows this.

    The market is expecting x level of adoption across segments. This is priced in. Will adoption be faster than this? Then bull run continues.

    Will adoption be really fast, yet slower than expected? This is where markets may get rough.

    To understand which one we’re heading for one doesn’t only have to form an opinion on where we’re going but also consider exactly what the market expects given current CAPEX and that’s what’s impossible for any of us to do, hence, the dicussion is quite dumb and pointless. Any attempt at doing this is just guessing.

  • RubbenRubben Member

    @MannDude said:
    Man, I was prepared to defend this like, "Yeah, unfortunately the price of everything is increasing. Tough tits, an extra dollar or two a month can be expected when they're probably already operating on thin margins as is."

    ... but then I saw how big the increase is. Pretty wild.

    But hey, in this market there is always a competitor doing it for less. A company that size, I'm sure they weighed options and have some sort of goal in mind that after many meetings decided could only be achieved by losing a bunch of customers at the cost of 2-3Xing their price. Less customers paying more is always better than many customers paying less, but kind of hard to start off as "cheap, for everyone" then flip to, "JK, we're expensive now"

    usually, i like it very big

    not this time

    Thanked by 2oloke MannDude
  • SaragoldfarbSaragoldfarb Member, Megathread Squad

    @gdarko said:

    @Samoht999 said:
    to replace my hetzner cx23 i got the leaseweb 1 x 4 vCPU - 6 GB vRAM - 100 GB NVMe Disk 2 years contract 2 years billing for 2.79€ / month

    are there similar offers from big providers?

    YABS or didn't happened

    Comes close when I ordered though

  • @Saragoldfarb said:
    Comes close when I ordered though

    Why I'm not even surprised it's you who somehow managed to get the best deals?
    Left nothing for the rest of us 😠

  • rpqurpqu Member
    edited June 21

    @fiberstate said:

    @DS26 said:

    @gremeyer said:

    @DS26 said:
    Can anyone running a DC and selling dedicated servers comment on whether these price rises are to be expected across the board? I've got some servers I don't need but I'm nervous to let them go given they're on relatively cheap pricing.

    Eg I would consider this my worst value auction server and I don't really need it currently but I'm worried I won't be able to get something with same NVME for similar price:
    Xeon Gold 5412u
    128gb RAM
    3x 3.84TB NVME
    190 euros/mo

    It only applies to new orders for now.

    My question is more whether we can expect similar price rises across the industry for new services, so I know whether to hold older services I have but could let go. Hetzner's statement seems to suggest that they expect the industry to align to their prices. Personally I don't see RAM and NVME prices coming down in the short to medium term, hopefully it's also not going up much more either, but are the kind of prices we are seeing from hertzner now really what is needed to cover current hardware prices?

    For everyone saying AI demand is a bubble, ask yourself how much AI has already integrated into the internet ecosystem. Now add medical, vehicle, and robotics control to the equation, and in 5–10 years, data center and compute infrastructure will continue to be among the most in-demand sectors the world has ever seen. Compute is a commodity, just like oil or anything else.

    Will new manufacturing capacity come online and alleviate some of this crunch? Sure. But demand will continue, and in many cases, it will outpace manufacturing capacity for the foreseeable future. Compute has always greatly benefited from scale. AI inference will absolutely drive cloud demand to dizzying new heights.

    Utilities are refusing Data Center interconnects due to grid constraints, water rights are being heavily fought over, industrial electricians are in high demand and most new data center space is focused solely on hyper scale.

    As you said, the demand is real. AI is also a commodity — people have moved from capability benchmarks to token pricing. So what shapes token pricing? The cost of building datacenters, electricity, and hardware, divided by how many tokens the hardware stack can produce.

    NVIDIA's roadmap shows token generation capability increasing by an order of magnitude within two quarters. That doesn't include LPU/XPU solutions (Groq, Cerebras) that increase production further.

    If the denominator increases, the only way the price holds is if the numerator rises proportionally — meaning GPU prices have to compensate. With current BoM, even a 2.5× materials cost increase doesn't offset a 10× jump in token throughput. So token prices will go lower.

    The bubble crowd implies AI labs massively subsidize their product. They do — but subsidy now doesn't mean they can't be profitable later. Midjourney is profitable on Y2025. When token costs drop, the gap between cost and price closes, and labs move into margin.

    But here's what the bubble crowd misframes: the risk isn't in the labs. It's in the infrastructure layer. When token prices drop, previous-generation hardware becomes economically indefensible — not gradually, abruptly. The right amortization window for a Blackwell cluster isn't 36 months, it's closer to 12. The Anthropic-xAI Colossus contract already shows why: H100/H200 clusters at implied ~$3.65/Mtoken cost, against Vera Rubin's projected floor of $0.02–0.05/Mtoken. That's 73–180× more expensive per token. It's not depreciation — it's obsolescence within the financing window.

    If an AI lab walks away — or simply refuses to renew on older hardware — the operator absorbs the loss. The operator effectively subsidized the lab's operation, funded by whatever profits they had or debt they could raise. When the cluster value drops, the debt face value doesn't follow. The credit-default-swap does — in the other direction.

    Thanked by 1rcy026
  • edited June 21

    @fiberstate said:

    @mpkossen said:

    @fiberstate said:
    Absolutely keep a server if it’s at a good price. It’s only expected to get worse from here. Everything is through the roof: electricity, real estate, space availability, and, of course, hardware, which is up 500% with little to no availability, even if you’re willing to accept an absurd price increase and wait six months or more for delivery from manufacturers.

    32 GB DDR5 ECC memory is now $1,850 per chip, and most vendors have only a few in stock at any given time.

    For everyone saying AI demand is a bubble, ask yourself how much AI has already integrated into the internet ecosystem. Now add medical, vehicle, and robotics control to the equation, and in 5–10 years, data center and compute infrastructure will continue to be among the most in-demand sectors the world has ever seen. Compute is a commodity, just like oil or anything else.

    Will new manufacturing capacity come online and alleviate some of this crunch? Sure. But demand will continue, and in many cases, it will outpace manufacturing capacity for the foreseeable future.

    People are saying there's an AI bubble not because AI isn't providing value. It's because none of the AI majors are profitable yet. Some of them don't even have a path to profitability. Yet more and more money is being dumped on it, with cost driven up because of high demand. A whole bunch of these smaller companies, and perhaps even some of the majors, will start BK-ing at one point. This will ease pressure on the market.

    Yet every single Internet behemoth started in a arguably non-profitable way, Google, Facebook, etc. and all found ways to mega profits by absorbing an important industries market share.

    You haven't really been around during .com, have you? Sure starting out operating at a loss sometimes leads to very profitable projects but it's far from a guarantee and in this case it's not even that much about the companies themselves being able to operate economically but if the product they sell manages to provide an economical advantage to their users. The AI support agent is regularly only useful as long as it costs less than the human it replaces. Sure, there's a whole lot of different angles but in a large part the big question comes down to: Will the final product, which highly likely will be x-times as expensive as it is now, still be attractive to potential buyers?

    @rpqu said:
    So what shapes token pricing?

    Currently probably mostly how much loss the seller is willing to take for subsidizing it.

    Thanked by 1coolice
  • @rpqu said:

    @fiberstate said:

    @DS26 said:

    @gremeyer said:

    @DS26 said:
    Can anyone running a DC and selling dedicated servers comment on whether these price rises are to be expected across the board? I've got some servers I don't need but I'm nervous to let them go given they're on relatively cheap pricing.

    Eg I would consider this my worst value auction server and I don't really need it currently but I'm worried I won't be able to get something with same NVME for similar price:
    Xeon Gold 5412u
    128gb RAM
    3x 3.84TB NVME
    190 euros/mo

    It only applies to new orders for now.

    My question is more whether we can expect similar price rises across the industry for new services, so I know whether to hold older services I have but could let go. Hetzner's statement seems to suggest that they expect the industry to align to their prices. Personally I don't see RAM and NVME prices coming down in the short to medium term, hopefully it's also not going up much more either, but are the kind of prices we are seeing from hertzner now really what is needed to cover current hardware prices?

    For everyone saying AI demand is a bubble, ask yourself how much AI has already integrated into the internet ecosystem. Now add medical, vehicle, and robotics control to the equation, and in 5–10 years, data center and compute infrastructure will continue to be among the most in-demand sectors the world has ever seen. Compute is a commodity, just like oil or anything else.

    Will new manufacturing capacity come online and alleviate some of this crunch? Sure. But demand will continue, and in many cases, it will outpace manufacturing capacity for the foreseeable future. Compute has always greatly benefited from scale. AI inference will absolutely drive cloud demand to dizzying new heights.

    Utilities are refusing Data Center interconnects due to grid constraints, water rights are being heavily fought over, industrial electricians are in high demand and most new data center space is focused solely on hyper scale.

    As you said, the demand is real. AI is also a commodity — people have moved from capability benchmarks to token pricing. So what shapes token pricing? The cost of building datacenters, electricity, and hardware, divided by how many tokens the hardware stack can produce.

    NVIDIA's roadmap shows token generation capability increasing by an order of magnitude within two quarters. That doesn't include LPU/XPU solutions (Groq, Cerebras) that increase production further.

    If the denominator increases, the only way the price holds is if the numerator rises proportionally — meaning GPU prices have to compensate. With current BoM, even a 2.5× materials cost increase doesn't offset a 10× jump in token throughput. So token prices will go lower.

    The bubble crowd implies AI labs massively subsidize their product. They do — but subsidy now doesn't mean they can't be profitable later. Midjourney is profitable on Y2025. When token costs drop, the gap between cost and price closes, and labs move into margin.

    But here's what the bubble crowd misframes: the risk isn't in the labs. It's in the infrastructure layer. When token prices drop, previous-generation hardware becomes economically indefensible — not gradually, abruptly. The right amortization window for a Blackwell cluster isn't 36 months, it's closer to 12. The Anthropic-xAI Colossus contract already shows why: H100/H200 clusters at implied ~$3.65/Mtoken cost, against Vera Rubin's projected floor of $0.02–0.05/Mtoken. That's 73–180× more expensive per token. It's not depreciation — it's obsolescence within the financing window.

    If an AI lab walks away — or simply refuses to renew on older hardware — the operator absorbs the loss. The operator effectively subsidized the lab's operation, funded by whatever profits they had or debt they could raise. When the cluster value drops, the debt face value doesn't follow. The credit-default-swap does — in the other direction.

    Did you use AI to write this ?

  • edited June 21

    @Samoht999 said:

    @rpqu said:

    @fiberstate said:

    @DS26 said:

    @gremeyer said:

    @DS26 said:
    Can anyone running a DC and selling dedicated servers comment on whether these price rises are to be expected across the board? I've got some servers I don't need but I'm nervous to let them go given they're on relatively cheap pricing.

    Eg I would consider this my worst value auction server and I don't really need it currently but I'm worried I won't be able to get something with same NVME for similar price:
    Xeon Gold 5412u
    128gb RAM
    3x 3.84TB NVME
    190 euros/mo

    It only applies to new orders for now.

    My question is more whether we can expect similar price rises across the industry for new services, so I know whether to hold older services I have but could let go. Hetzner's statement seems to suggest that they expect the industry to align to their prices. Personally I don't see RAM and NVME prices coming down in the short to medium term, hopefully it's also not going up much more either, but are the kind of prices we are seeing from hertzner now really what is needed to cover current hardware prices?

    For everyone saying AI demand is a bubble, ask yourself how much AI has already integrated into the internet ecosystem. Now add medical, vehicle, and robotics control to the equation, and in 5–10 years, data center and compute infrastructure will continue to be among the most in-demand sectors the world has ever seen. Compute is a commodity, just like oil or anything else.

    Will new manufacturing capacity come online and alleviate some of this crunch? Sure. But demand will continue, and in many cases, it will outpace manufacturing capacity for the foreseeable future. Compute has always greatly benefited from scale. AI inference will absolutely drive cloud demand to dizzying new heights.

    Utilities are refusing Data Center interconnects due to grid constraints, water rights are being heavily fought over, industrial electricians are in high demand and most new data center space is focused solely on hyper scale.

    As you said, the demand is real. AI is also a commodity — people have moved from capability benchmarks to token pricing. So what shapes token pricing? The cost of building datacenters, electricity, and hardware, divided by how many tokens the hardware stack can produce.

    NVIDIA's roadmap shows token generation capability increasing by an order of magnitude within two quarters. That doesn't include LPU/XPU solutions (Groq, Cerebras) that increase production further.

    If the denominator increases, the only way the price holds is if the numerator rises proportionally — meaning GPU prices have to compensate. With current BoM, even a 2.5× materials cost increase doesn't offset a 10× jump in token throughput. So token prices will go lower.

    The bubble crowd implies AI labs massively subsidize their product. They do — but subsidy now doesn't mean they can't be profitable later. Midjourney is profitable on Y2025. When token costs drop, the gap between cost and price closes, and labs move into margin.

    But here's what the bubble crowd misframes: the risk isn't in the labs. It's in the infrastructure layer. When token prices drop, previous-generation hardware becomes economically indefensible — not gradually, abruptly. The right amortization window for a Blackwell cluster isn't 36 months, it's closer to 12. The Anthropic-xAI Colossus contract already shows why: H100/H200 clusters at implied ~$3.65/Mtoken cost, against Vera Rubin's projected floor of $0.02–0.05/Mtoken. That's 73–180× more expensive per token. It's not depreciation — it's obsolescence within the financing window.

    If an AI lab walks away — or simply refuses to renew on older hardware — the operator absorbs the loss. The operator effectively subsidized the lab's operation, funded by whatever profits they had or debt they could raise. When the cluster value drops, the debt face value doesn't follow. The credit-default-swap does — in the other direction.

    Did you use AI to write this ?

    In hindsight it's kinda obvious with all the long dashes, formating and how annoying it is to read it.

  • rpqurpqu Member

    @Samoht999 said:

    @rpqu said:

    @fiberstate said:

    @DS26 said:

    @gremeyer said:

    @DS26 said:
    Can anyone running a DC and selling dedicated servers comment on whether these price rises are to be expected across the board? I've got some servers I don't need but I'm nervous to let them go given they're on relatively cheap pricing.

    Eg I would consider this my worst value auction server and I don't really need it currently but I'm worried I won't be able to get something with same NVME for similar price:
    Xeon Gold 5412u
    128gb RAM
    3x 3.84TB NVME
    190 euros/mo

    It only applies to new orders for now.

    My question is more whether we can expect similar price rises across the industry for new services, so I know whether to hold older services I have but could let go. Hetzner's statement seems to suggest that they expect the industry to align to their prices. Personally I don't see RAM and NVME prices coming down in the short to medium term, hopefully it's also not going up much more either, but are the kind of prices we are seeing from hertzner now really what is needed to cover current hardware prices?

    For everyone saying AI demand is a bubble, ask yourself how much AI has already integrated into the internet ecosystem. Now add medical, vehicle, and robotics control to the equation, and in 5–10 years, data center and compute infrastructure will continue to be among the most in-demand sectors the world has ever seen. Compute is a commodity, just like oil or anything else.

    Will new manufacturing capacity come online and alleviate some of this crunch? Sure. But demand will continue, and in many cases, it will outpace manufacturing capacity for the foreseeable future. Compute has always greatly benefited from scale. AI inference will absolutely drive cloud demand to dizzying new heights.

    Utilities are refusing Data Center interconnects due to grid constraints, water rights are being heavily fought over, industrial electricians are in high demand and most new data center space is focused solely on hyper scale.

    As you said, the demand is real. AI is also a commodity — people have moved from capability benchmarks to token pricing. So what shapes token pricing? The cost of building datacenters, electricity, and hardware, divided by how many tokens the hardware stack can produce.

    NVIDIA's roadmap shows token generation capability increasing by an order of magnitude within two quarters. That doesn't include LPU/XPU solutions (Groq, Cerebras) that increase production further.

    If the denominator increases, the only way the price holds is if the numerator rises proportionally — meaning GPU prices have to compensate. With current BoM, even a 2.5× materials cost increase doesn't offset a 10× jump in token throughput. So token prices will go lower.

    The bubble crowd implies AI labs massively subsidize their product. They do — but subsidy now doesn't mean they can't be profitable later. Midjourney is profitable on Y2025. When token costs drop, the gap between cost and price closes, and labs move into margin.

    But here's what the bubble crowd misframes: the risk isn't in the labs. It's in the infrastructure layer. When token prices drop, previous-generation hardware becomes economically indefensible — not gradually, abruptly. The right amortization window for a Blackwell cluster isn't 36 months, it's closer to 12. The Anthropic-xAI Colossus contract already shows why: H100/H200 clusters at implied ~$3.65/Mtoken cost, against Vera Rubin's projected floor of $0.02–0.05/Mtoken. That's 73–180× more expensive per token. It's not depreciation — it's obsolescence within the financing window.

    If an AI lab walks away — or simply refuses to renew on older hardware — the operator absorbs the loss. The operator effectively subsidized the lab's operation, funded by whatever profits they had or debt they could raise. When the cluster value drops, the debt face value doesn't follow. The credit-default-swap does — in the other direction.

    Did you use AI to write this ?

    For grammatical and data augmentation purpose.. 90-95% of words could be traced to earlier version I wrote. Around 2-3% is a phrasing correction while the rest is the augmentation.
    If this site logs changes to drafts, the site administrator and moderator could attest my statement.
    Any question?

  • rpqurpqu Member

    @totally_not_banned said:

    @Samoht999 said:

    @rpqu said:

    @fiberstate said:

    @DS26 said:

    @gremeyer said:

    @DS26 said:
    Can anyone running a DC and selling dedicated servers comment on whether these price rises are to be expected across the board? I've got some servers I don't need but I'm nervous to let them go given they're on relatively cheap pricing.

    Eg I would consider this my worst value auction server and I don't really need it currently but I'm worried I won't be able to get something with same NVME for similar price:
    Xeon Gold 5412u
    128gb RAM
    3x 3.84TB NVME
    190 euros/mo

    It only applies to new orders for now.

    My question is more whether we can expect similar price rises across the industry for new services, so I know whether to hold older services I have but could let go. Hetzner's statement seems to suggest that they expect the industry to align to their prices. Personally I don't see RAM and NVME prices coming down in the short to medium term, hopefully it's also not going up much more either, but are the kind of prices we are seeing from hertzner now really what is needed to cover current hardware prices?

    For everyone saying AI demand is a bubble, ask yourself how much AI has already integrated into the internet ecosystem. Now add medical, vehicle, and robotics control to the equation, and in 5–10 years, data center and compute infrastructure will continue to be among the most in-demand sectors the world has ever seen. Compute is a commodity, just like oil or anything else.

    Will new manufacturing capacity come online and alleviate some of this crunch? Sure. But demand will continue, and in many cases, it will outpace manufacturing capacity for the foreseeable future. Compute has always greatly benefited from scale. AI inference will absolutely drive cloud demand to dizzying new heights.

    Utilities are refusing Data Center interconnects due to grid constraints, water rights are being heavily fought over, industrial electricians are in high demand and most new data center space is focused solely on hyper scale.

    As you said, the demand is real. AI is also a commodity — people have moved from capability benchmarks to token pricing. So what shapes token pricing? The cost of building datacenters, electricity, and hardware, divided by how many tokens the hardware stack can produce.

    NVIDIA's roadmap shows token generation capability increasing by an order of magnitude within two quarters. That doesn't include LPU/XPU solutions (Groq, Cerebras) that increase production further.

    If the denominator increases, the only way the price holds is if the numerator rises proportionally — meaning GPU prices have to compensate. With current BoM, even a 2.5× materials cost increase doesn't offset a 10× jump in token throughput. So token prices will go lower.

    The bubble crowd implies AI labs massively subsidize their product. They do — but subsidy now doesn't mean they can't be profitable later. Midjourney is profitable on Y2025. When token costs drop, the gap between cost and price closes, and labs move into margin.

    But here's what the bubble crowd misframes: the risk isn't in the labs. It's in the infrastructure layer. When token prices drop, previous-generation hardware becomes economically indefensible — not gradually, abruptly. The right amortization window for a Blackwell cluster isn't 36 months, it's closer to 12. The Anthropic-xAI Colossus contract already shows why: H100/H200 clusters at implied ~$3.65/Mtoken cost, against Vera Rubin's projected floor of $0.02–0.05/Mtoken. That's 73–180× more expensive per token. It's not depreciation — it's obsolescence within the financing window.

    If an AI lab walks away — or simply refuses to renew on older hardware — the operator absorbs the loss. The operator effectively subsidized the lab's operation, funded by whatever profits they had or debt they could raise. When the cluster value drops, the debt face value doesn't follow. The credit-default-swap does — in the other direction.

    Did you use AI to write this ?

    In hindsight it's kinda obvious with all the long dashes, formating and how annoying it is to read it.

    Wrote into notebook

    troll @totally_not_banned using AI rephrase the response

    image

  • Samoht999Samoht999 Member
    edited June 21

    @rpqu said:
    For grammatical and data augmentation purpose.. 90-95% of words could be traced to earlier version I wrote. Around 2-3% is a phrasing correction while the rest is the augmentation.

    It's not augmentation, it's entropy expansion.

  • rpqurpqu Member
    edited June 21

    @Samoht999 said:

    @rpqu said:
    For grammatical and data augmentation purpose.. 90-95% of words could be traced to earlier version I wrote. Around 2-3% is a phrasing correction while the rest is the augmentation.

    It's not augmentation, it's entropy inflation.

    increasement -> inflation -> expansion

    You could figure out the key content using the words in bold.
    Those quantitative data are necessary as examples.

  • @rpqu said:
    Wrote into notebook

    troll @totally_not_banned using AI rephrase the response

    image

    You do what you gotta do.

  • rpqurpqu Member

    @totally_not_banned said:

    @rpqu said:
    Wrote into notebook

    troll @totally_not_banned using AI rephrase the response

    image

    You do what you gotta do.

    You're absolutely right!

Sign In or Register to comment.