You seem a little confused about how virtualization works. Think about whether your question was as follows:
"If I let someone sit on my computer, do they have root privileges?"
A virtual machine is simply an image that "represents" this machine. This is not fundamentally different from the fact that you had your own physical machine managed by a hosting provider.
One exception may depend on the installation process of the provider. They ask you for the initial root password to configure your VPS? If so, they can record it, but as soon as you first enter your environment, if you change it, they will no longer know about it.
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