OVHcloud announced steep price increases reaching up to 87 percent for dedicated servers, driven by a global memory shortage. Octave Klaba traced the crisis to AI hardware demand pulling fabrication capacity away from standard components, forcing rolling quarterly price adjustments that will last until 2028.
The Anatomy of RAMaggedon and Surging Component Costs
A profound hardware crunch is reshaping the economics of cloud computing. Memory and storage costs have climbed steeply since mid-2025, driven by an AI buildout that is aggressively pulling fabrication capacity away from the standard components ordinary servers rely on. Three global RAM suppliers have reconfigured their factories toward high-bandwidth memory to serve GPUs and capture better margins, leaving standard DDR4 and DDR5 production starved.
OVHcloud purchasing data indexed to June 2025 illustrates the staggering scale of the price inflation. By June 2026, memory reached an index of 604, solid-state drives hit 323, and hard drives rose to 148. The trajectory points sharply upward: the company paid six times the price for RAM in June 2026 compared to June 2025, expects costs to hit nine times by September 2026, and forecasts multipliers of twelve times by early 2027. NVMe drives are tracking at seven times their previous cost, while hard drives stand at 3.5 times, alongside anticipated increases of 15 to 20 percent for CPUs, motherboards, and network cards.
Product Price Hikes and Restructured Savings Plans
The resulting price increases land unevenly across the provider’s catalog. Dedicated server pricing adjustments vary by product line, with averages seeing a 28 percent increase for Gen 2024 hardware and a 51 percent rise for Gen 2026 equipment. The steepest jump hits the latest-generation gaming infrastructure, which climbs by as much as 87 percent starting in September.
To shield customers from prohibitive upfront costs on brand-new hardware, the company chose to apply price increases selectively to existing customers running very recent equipment utilizing DDR5 RAM. Older ranges, including Kimsufi, Rise, and earlier Advance and Scale generations, remain untouched, mirroring an earlier pricing adjustment from April.
“To prevent new offers from becoming unaffordable, we have also chosen to apply a price increase to services already in use by our existing customers, but only for very recent equipment using the latest generation of RAM: DDR5. This makes the increase more moderate for everyone, and allows us to continue offering you new equipment at an affordable price.”
Octave Klaba, OVHcloud
Beyond headline price hikes, the company is restructuring service billing. Storage and IP addresses become separate line items on Gen3 instances starting October 1, billed at €0.000146 per GB per hour and €0.0027 per hour. Furthermore, shorter one-month, six-month, and 24-month saving plans are being dropped in favor of 12- and 36-month options designed to lock in pricing for their full duration.
Market Pressures and the Hyperscaler Divide
The broader cloud industry faces a familiar squeeze, but smaller providers bear a disproportionate burden compared to major hyperscalers. Procurement scale and vertical integration explain the widening gap in market resilience. While major cloud operators contract for memory years in advance and secure priority factory allocation while designing proprietary accelerators, a provider buying merchant components on rolling monthly orders has little cushion.
By contrast, Amazon absorbed similar market pressures with different mechanics, raising its reserved GPU product, EC2 Capacity Blocks for ML, by roughly 20 percent in July following a 15 percent increase in January, while largely leaving its broader catalog untouched. Industry observers note that the exceptional market conditions described as “RAMaggedon” are likely to prompt similar pricing moves across other major cloud platforms. With company leadership warning that the supply crunch will persist until 2028, customers and providers alike face an extended period of rolling capacity negotiations.
