Compared
Self-Host vs API for LLMs: Which Is Cheaper at Your Volume?
An LLM API charges per token with zero fixed cost, so it is cheap until you send a lot of traffic. Self-hosting rents a GPU by the hour whether it is busy or not, so it only pays off once you keep it full. The whole decision is a breakeven volume.
When Self-host on rented GPUs wins
- Your monthly token volume is high enough to keep a GPU near full utilization.
- You need data to stay in your own infrastructure for privacy or compliance.
- An open-weights model is good enough for your task, avoiding premium API rates.
- You have the ops capacity to run, monitor, and scale inference reliably.
When Pay-per-token API wins
- Your volume is low or spiky, so a full-time GPU would sit mostly idle.
- You want zero infrastructure to run and instant access to frontier models.
- You are still prototyping and your token volume is hard to predict.
- The engineering time to self-host costs more than the API bill it would save.
The honest answer
The deciding number is your monthly token volume versus the breakeven point where a rented GPU costs the same as the API bill. Below it the API wins on both cost and simplicity; above it self-hosting pulls ahead — but only if you can keep the GPU busy and staff the ops. Compute your breakeven before committing to hardware.
Run the numbers
Frequently asked questions
Does self-hosting include the cost of running it?+
The breakeven math covers GPU rental and token throughput, not your engineers' time, latency tuning, or redundancy. Those real costs push the breakeven volume higher, which is why the API often wins for smaller teams even above the raw cost crossover.
What token volume is the typical breakeven?+
It varies with the model, the GPU, and throughput, so there is no single number. The self-host-vs-api calculator computes it from official API prices and GPU hourly rates, with editable throughput assumptions.
Are the prices current?+
Prices come from a dated snapshot of official pricing pages and are labeled 'as of' that month. Rates change often, so verify against the provider before making a commitment.