Three very different approaches to hosting AI apps: Cloudways (managed cloud), Railway (PaaS), and Hetzner (bare metal VPS). Each has a sweet spot. Here’s how to pick.

Quick comparison

	Cloudways	Railway	Hetzner
Type	Managed cloud	PaaS	Bare metal VPS
Starting price	$14/mo	$5/mo + usage	€4.50/mo
Infrastructure	DigitalOcean, AWS, GCP, Vultr	Railway’s infra	Hetzner data centers (EU)
Deploy method	Git, SFTP, SSH	Git push	SSH, Docker
Managed services	SSL, backups, firewall, monitoring	SSL, databases, auto-deploy	Nothing (DIY)
Scaling	Vertical (resize server)	Horizontal (auto-scale)	Manual
GPU available	Via AWS/GCP backend	No	Dedicated GPU servers
Best for	Teams wanting managed infra	Solo devs wanting simplicity	Cost-optimized production

Cloudways: managed cloud hosting

Cloudways sits between raw cloud infrastructure and fully managed hosting. You pick your cloud provider (DigitalOcean, AWS, GCP, or Vultr), and Cloudways handles server management: SSL certificates, automated backups, firewall configuration, OS updates, and monitoring.

Pricing (DigitalOcean backend):

Plan	RAM	CPU	Storage	Price
DO1GB	1 GB	1 core	25 GB	$14/mo
DO2GB	2 GB	1 core	50 GB	$28/mo
DO4GB	4 GB	2 cores	80 GB	$54/mo
DO8GB	8 GB	4 cores	160 GB	$107/mo

AWS and GCP backends cost more but offer more regions and services.

Best for AI apps when:

• You need a managed server with SSH access (install Ollama, run Python scripts)
• Your team doesn’t want to manage OS updates, SSL, and backups
• You’re running multiple applications on one server
• You need a specific cloud provider for compliance or latency

Not ideal when:

• You just need to deploy a single app (Railway is simpler)
• You need GPU inference (RunPod or dedicated GPU servers)
• Budget is under $14/mo

Railway: PaaS simplicity

Railway is the simplest option. Push to GitHub, it deploys. Add a Postgres database in one click. No servers to manage, no SSH, no infrastructure decisions.

Pricing: $5/mo base + usage (CPU, memory, bandwidth). A typical AI app serving 1,000 requests/day costs $5-15/month on Railway.

Best for AI apps when:

• You want the fastest path from code to production
• Your app is a single service (API + database)
• You’re a solo developer or small team
• You don’t need SSH access or custom server configuration

Not ideal when:

• You need to install system-level packages (Ollama, custom binaries)
• You want predictable monthly costs (usage-based can surprise)
• You need multiple sites on one server

See our full Railway deploy tutorial for step-by-step setup.

Hetzner: bare metal value

Hetzner gives you a full Linux server in EU data centers at the lowest price. You manage everything: OS, packages, SSL, backups, monitoring. Maximum control, minimum cost.

Pricing:

Plan	RAM	CPU	Storage	Price
CX22	4 GB	2 vCPU	40 GB	€4.50/mo
CX32	8 GB	4 vCPU	80 GB	€8.50/mo
CX42	16 GB	8 vCPU	160 GB	€16.90/mo
Dedicated GPU	64 GB + GPU	8+ cores	512 GB	From €150/mo

Best for AI apps when:

• You want the cheapest hosting possible
• You need full control (custom packages, self-hosted AI)
• You’re running Ollama or vLLM locally
• GDPR compliance requires EU data residency
• You’re comfortable with Linux server administration

Not ideal when:

• You don’t want to manage servers
• You need auto-scaling
• You want managed databases and backups

Decision framework

"I don't want to manage servers"
  → Need multiple sites?     → Cloudways
  → Single app, fast deploy? → Railway

"I want full control + cheapest"
  → Need EU data residency?  → Hetzner
  → Need GPU?                → Hetzner dedicated or RunPod

"I need managed + GPU"
  → Cloudways with AWS backend (GPU instances)
  → Or RunPod for GPU + Railway for the app

The hybrid approach

Many production AI apps use a combination:

• Frontend on Vercel (free, global CDN)
• Backend API on Railway ($5-15/mo, simple deploys)
• AI inference on RunPod (GPU, pay per second)
• Database on Railway Postgres or Supabase

Or for maximum control:

• Everything on Hetzner VPS (€8.50/mo for 8GB RAM)
• Ollama for local inference
• Caddy for reverse proxy + auto SSL

Total cost: under €10/month for a full AI app stack.

Cost comparison at scale

Monthly traffic	Railway	Cloudways (DO)	Hetzner
100 users/day	$5-10	$14	€4.50
1K users/day	$15-30	$28	€4.50
5K users/day	$50-100	$54	€8.50
10K+ users/day	$100+	$107	€16.90

Railway gets expensive at scale because of usage-based pricing. Cloudways is predictable. Hetzner is cheapest at every tier but requires more ops work.

Related: Deploy AI App on Railway · Best Hosting for AI Side Projects · Best Cloud GPU Providers · Self-Hosted AI for Enterprise · AI App Deployment Checklist