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OVH Cloud warns of 87% price hikes to help it cover RAMpocalypse costs
OVH Cloud, a European cloud infrastructure provider, announced substantial pricing increases to offset soaring hardware costs driven by aggressive purchasing from artificial intelligence companies. The company's leadership reported that memory expenses have climbed sixfold over the past year and are projected to increase further to twelvefold by next year, while storage and processor costs have risen between 3.5 and 20 percent.
The increases, taking effect from September, will range from 40 to 87 percent depending on server specifications, with gaming infrastructure experiencing the most severe hikes. The company is simultaneously restructuring its billing model by separating storage and IP address charges as independent line items and discontinuing shorter-term pricing lock-in contracts. Management indicated it anticipates this unfavourable cost environment will persist through 2028, with expectations for market normalisation in 2029.
In short
- OVH Cloud is raising prices up to 87% starting September, citing AI-driven hardware cost inflation where memory costs have risen 6-12x in the past year
- Gaming servers face steepest increases; company restructuring billing model and expects elevated costs to persist through 2028
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
OVH faces genuine, documented hardware cost pressures that have made existing pricing untenable. With memory expenses rising sixfold and potentially reaching twelvefold, the company cannot maintain current pricing without rapid insolvency, which would ultimately harm all customers. By transparently disclosing the cost drivers and timeline for expected normalisation, OVH is communicating unavoidable market realities rather than opportunistic profiteering. Businesses must pass through major cost increases to remain viable; the alternative is collapse that serves no one.
The case against
Whilst cost pressures are real, OVH's decision to implement increases of up to 87 per cent simultaneously, coupled with structural billing changes that add new line items, disproportionately harms smaller businesses and startups dependent on affordable infrastructure. The company exercises pricing discretion and could absorb more costs through efficiency gains, accepting lower margins, or implementing graduated increases, rather than passing the full burden to customers in one shock. This competitive disadvantage for smaller players ultimately harms market innovation and concentrates power amongst enterprises that can afford steep price hikes.
Explained simply
OVHcloud rents out the computing power, memory and storage that businesses use to run websites, apps and online services. Customers choose servers with different specifications, and the cost depends partly on how much capacity they need.
Memory, also called RAM, lets a server handle information it is using at that moment; storage keeps data for longer. Both are hardware components, and demand from companies building AI systems has increased competition for supplies. Cloud providers must weigh these costs against what they charge customers.
Changes to server prices can affect businesses that rely on rented infrastructure, including game operators and website providers. They may need to absorb higher bills, adjust their services or consider other suppliers.