The Tradeoff

• API: Pay per use, no maintenance, latest models
• Self-host: Control, no per-request costs, but hardware + ops

API Costs (cloud)

Model	Input/1M	Output/1M	100K requests/mo
GPT-4o	$2.50	$10.00	$625
Claude 4	$15.00	$75.00	$4,500
Gemini Flash	$0.30	$2.50	$140

Self-Hosted Costs (one-time)

Model	GPU Needed	Hardware Cost	Monthly Electricity
Llama 3.3 70B	A100 80GB	~$15K	~$200
DeepSeek R1 671B	8x H100	~$100K	~$1,500
Qwen 2.5 72B	A100 80GB	~$15K	~$200

Break-Even Analysis

Self-hosting makes sense when:

• 50K requests/month for premium models

• Need data privacy (can’t send to API)
• Need custom fine-tuned models

API makes sense when:

• Starting out
• Variable traffic
• Need latest models

Our Recommendation

• Start: API (pay as you go)
• Scale: Evaluate self-host at 100K+ requests
• Privacy-sensitive: Self-host from day one