On‑premises AI vs. API : Break‑even Point

Buying a machine to run a model in‑house, renting a GPU, or paying for an API: at what volume does each option become the cheapest? This tool compares all three based on your actual usage.

How to use it

  1. Enter your monthly input and output tokens, in millions, and select the API model for comparison.
  2. Describe your machine: price, depreciation period, power, electricity cost, generation throughput, and any standby consumption.
  3. Provide the hourly rate for GPU rental.
  4. Read the three monthly costs, the machine’s occupancy rate, and the verdict statement.

Principles behind the calculation

  • The API cost is the monthly volume multiplied by the chosen model’s prices, converted to euros.
  • Compute time comes from throughput: output ÷ generation throughput, plus input ÷ (throughput × prompt reading multiple).
  • The on‑premises cost adds depreciation (price ÷ months) and electricity consumed during that compute time, plus any standby; rental multiplies compute hours by the hourly rate.
  • The break‑even point is the hardware price divided by the monthly savings compared to the API, after deducting electricity. Occupancy compares compute hours to the 720 hours in a month.

Limitations to be aware of

A local model is rarely equivalent to a cutting‑edge API model: compare it to a model of the same class. The calculation ignores your time, maintenance, quality of service, load spikes, caching, and long context.