More like China-factor to get us out of the mess. We wait for Huawei photonics gpus (end of this year), CXMT and YMTC ramping up production to flood the market or as Janet coined it overcapacity. You know China will undercut the price significantly.
AI bubble won't last forever when a lot of compute is burned at a loss just so people can generate AI videos of sharks driving cars for social media shorts. It will burst at some point, at which HW manufacturing will have to lower prices if they still want to have enough sales to stay in business, since most of their current sales boom comes from HW they haven't even made yet.
OpenAI can't keep losing investor money forever with nothing to show for, at some point the first domino will fall, then the rest of the industry will go too from investor panic.
>All it'll take is one company to go bust, oracle for example, for the whole thing to deflate
Provided that of course, the US administration will be incorruptible enough to not bail out these tech companies with taxpayer money when they do eventually fail.
But when you see the connection between Larry Ellison and Trump, you realize the whole "free market competition" is a scam for suckers. Always has been, just that now they don't even bother to hide it via some complex facades and shell games to garner a veneer of legitimacy, it's straight up banana republic style of corruption.
> Provided that of course, the US administration will be incorruptible enough to not bail out these tech companies with taxpayer money when they do eventually fail.
I'd love them to try that because virtually no one on any part of the political spectrum would get behind that besides the most corrupted and soulless ghouls masquerading as politicians
I dunno between following the party king and "we must bail them out to avoid total economic collapse" (real or imagined), I wouldn't be betting against bailouts.
I really don't think so. I feel like we're at a takeoff.
Senior engineers using AI coding are 10x more productive. My output has jumped dramatically. I'm a senior engineer and built six nines, active-active systems that moved billions of dollars a day. I am absolutely a beast with these models. I can replace an entire team just by myself. I'm literally shipping an entire week of features in half a day. I'm reviewing the code and planning the architecture - I am not dialing this in.
Video editors using video models can replace entire studio production departments. Writer-directors who know how to direct are essentially now Hollywood studios in their own right. I know a lot about this in particular because I've been making films as a hobby for 15+ years and work with a lot of industry professionals.
You'll see a lot of slop, but that's the same thing we got when we gave the masses cell phones with cameras attached to them. We still have plenty of amazing photographers in the world, and the means of creation are only getting cheaper/easier and the scope of creation for any individual is growing and growing and growing.
So prices will need to increase -- if it makes a senior engineer 10x more productive then coding assistants could easily cost 20x-100x more then what they cost today. Same for video generation.
Given that 10x engineers cost in the millions and that movies cost in the hundreds of millions - this is okay!
Edit: HN rate limit won't let me reply, so here -
I'm saying that hiring ten senior engineer costs millions. (Not a single 10xer - that's such a debated thing anyway, Fabrice Bellard or not.)
AI companies will make bank when they've hooked us all on the tools and raise prices.
Companies would likely rather pay $500k/yr to Anthropic and $750k/yr to engineers than $2M/yr to an uneven team of humans with HR, taxes, and other expenses, attrition, etc.
How many 10x engineers paid millions are out there? How can you stay in business as an AI company by only charging those 10x engineers 200/month?
Edit: Fabrice Bellard is a 10x engineers because he invents cool and innovative tools that didn't exist, not because he can bang out code 10x faster. AI can't replace fabrice Ballard.
If you are able now to create 10 products instead of 1 in the same time frame you will have to plan, review and maintain 10 things instead of 1. How can this work? I mean to double your productivity is a huge jump but 10x sounds unsustainable.
Well, AI fanatics aren't about longevity or maintaining things. The fact that the LLM spit out a bunch of code is good enough for them. Drive-by PRs and vaporware are their bread & butter.
Yea but are you paying a profitable amount of money to your service provider for you to do it? I find it hard to believe that Anthropic is profiting off of my $100/mo subscription based on how active I keep my machines running.
The numbers mentioned by Ed Zitron in his podcast Better Offline recently suggested that a $200/mo Claude subscription allows you to spend $2300 - $2700 worth of Anthropic tokens. That's pretty bad, but better than I expected.
I don't see it being unreasonable that models and infrastructure could improve enough to bridge the cost gap within five to ten years. It's just that the AI companies already spend so much money that it might not matter.
The video models aren’t that good yet but for coding the utility is clear, yes. To be fair Darren Aronofsky also overestimates their quality.
Correct me if I’m wrong, but generating video is also much more resource intensive than equivalently productive text-only model use. It seems the industry could save itself a lot of hassle and infamy by simply avoiding artistic fields.
>Senior engineers using AI coding are 10x more productive.
Are the subscriptions of those engineers enough to make their use-case profitable and on top to also be subsidizing the cost of AI video slop generation and keep the company profitable?
>Video editors using video models can replace entire studio production departments.
Then why is OpenAI losing more an more money?
>This is the next industrial revolution.
I'm not saying it isn't, but we did have the .com bubble burst even though that was also revolution. Something can be a bubble and a revolution simultaneously. The internet didn't go away after the .com bubble burst, just the crazy speculations did, which is what I was saying will happen with the AI bauble. The bubble will burst and only the profit generating parts of AI will remain.
> I can replace an entire team just by myself. I'm literally shipping an entire week of features in half a day. I'm reviewing the code and planning the architecture - I am not dialing this in.
So you can review so much code so fast? Are you sure?
In many companies code reviews (properly) are the bottleneck. This was the case without AI. Now you're saying AI is giving you 10x more code reviews and you're even faster.
What am I missing?
p.s. I agree AI can make you and things faster just not suddenly god mode.
10x AI speed up only happens when you stop reading the code (or start skimming it, etc). This is pretty obvious to anyone that uses the tools and many vibe coding proponents have said as much.
Sacrificing quality for quantity makes these tools much less impressive. I say this as I tab over to my bug ridden memory hog CC tmux tab.
Video editors using video models can replace entire studio production departments. Writer-directors who know how to direct are essentially now Hollywood studios in their own right. I know a lot about this in particular because I've been making films as a hobby for 15+ years and work with a lot of industry professionals.
This is soul destroying. Literally made my day worse thinking about this.
As a customer, I am OK with most increases but not the object storage one. This one has some quality issues and is no longer competitive in price either. I'm thinking of moving S3 part to OVH.
I would expect a large provider like Hetzner to refresh hardware continuously - every year a fraction of old hardware is retired and replaced by new. Given price shock they could stop doing this but older hardware is less energy efficient and has limited life anyway.
Hetzner mostly ate up the rising energy prices in germany for the last 3 years and they have big problems with their hardware supply since then. It is hard to get cloud instances in nbg and fsn. So an increase in pricing is very much expected from my side.
A PUE of 1.00 means all of your electricity is used for compute and none for cooling (and other things). "as much electricity for cooling as you spend of compute" would be a PUE of 2. It's "total / compute". And PUE of 2 would be quite bad, most facilities are better than 2.
Thanks. Looks like I misremembered the formula. We run way lower than 2. I have seen some systems running with 1.0x values (I don't remember the exact value).
However, this doesn't mean that the increase in energy costs are not affecting Hetzner.
I have been buying older servers by the truckloads. Older being a year or so. It will be enough to host whatever outside AI that we need for the coming 15-20 years. And the all were great deals, will have them paid for within a month per server. I have my own cage full with empty racks bought from a bankrupt company in AMS.
There's no mention of RAM upgrades. If we bought RAM already at the old prices, are they being increased as well? The current pricing for RAM has more than quadrupled since January.
Hi there, To the best of my knowledge, anyone with *existing* RAM *add-ons* that were affected by price changes should have received a separate email. Please carefully check your email inbox/trash/spam.
The general price changes we announced today will affect both new and existing products, like dedicated servers and cloud servers: https://docs.hetzner.com/general/infrastructure-and-availabi... Those prices will take effect on 1 April 2026. --Katie
> There have been drastic price increases in various areas in the IT branch recently. That is why, unfortunately, we must also increase the prices of our products.
> The costs to operate our infrastructure and to buy new hardware have both increased dramatically. Therefore, our price changes will affect both existing products and new orders and will take effect starting on 1 April 2026.
> We have genuinely tried hard to optimize our costs and to prevent increasing our prices for as long as possible. But we can no longer compensate for the strain that it has placed on our operations. We want to continue to deliver quality products that meet both our standards and your expectations, so we must take this step.
Seems poor translation. The German version only speaks about rising costs in various areas, no mention of any IT branch. They probably meant the whole IT market in general, not specifically their own company or some branch of it.
It's a German hosting company making a translation error from the German "IT-Branche". The wording doesn't appear in the German version, but very well could have at some point in the process.
Knock-down effects from the RAM shortage, starting to see CPUs shortage (lead times for Intel at 6 months for server-class CPUs, AMD also notified enterprise customers about a crunch), GPUs shortage, storage prices are increasing a lot as well.
Everything is much more expensive on the hardware-side at this moment, I think we will see these price increases across any provider that requires hardware, I'm just waiting until Backblaze notifies they will also need to increase pricing due to this.
AI is sucking money from everything, not only financial markets, it includes all of us consumers of anything that requires hardware to run on.
Hopefully this craze dies down in the next 1-2 years because it will be untenable to be paying 2-3x prices for the same technology we had for quite cheap just a year ago...
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...
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.
What is the point of paying $5000/month to keep a job which pays $10000/month?
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
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.
Right now we are in the cheap phase.
Price can easily triple
Nope, because the only companies making money on this bs are companies selling pickaxes and shovels
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.
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.
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.
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.
This is soul destroying. Literally made my day worse thinking about this.
This is my friends' lives.
That should make your day worse.
Why?
Used to be every VPS refresh cycle you'd get more server for less money. This is miserable
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.
$0.60 will be added for the IPv4.
Is the price hike only on Hetzner's offer for dedicated or VPS servers?
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...
> 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