To clear up any confusion from the go; RAM is memory, and memory is RAM. You don’t want to confuse memory with storage – which is the disk space your server has.
Garry’s Mod is built on the Source Engine – which uses SRCDS for it’s game servers. SRCDS is 32 bit, so it can’t use more than 2GB of ram on Windows, and 4GB on Linux. (Technically it’s 3GB on Linux as 1GB is assigned to the kernel) – We use Linux for reference.
For most people 3GB of ram provides more resource than they’ll ever use, however if you really want to be sure – 4GB of ram is the most your server can use without pretty extensive modification.
Some servers have a unique requirement – and can use more memory. For these people, we allow you to select up to 8GB of ram, which is way more than any service should ever need, but we can provide more on a case-by-case basis if you have a valid reason for it. If you’re looking for a performance improvement, it’s probably better to focus on increasing your CPU amount over your memory – unless you’ve hitting the max amount of memory while your service is running.
Your service running out of memory can cause crashing, so we advise all production servers have at least 3GB of ram.