Open-Source vs Closed LLMs: Running Llama 3 vs Paying OpenAI API Fees

Self-hosting open-source LLMs like Llama 3 promises data privacy and zero per-token billing. But server GPU compute is far from free.

Let us compare hosted API tokens against dedicated GPU server instances.

When Hosted APIs Win

If your application handles fewer than 5 million tokens per day, paying per token via commercial API is almost always cheaper than reserving 24/7 GPU instances.

When Self-Hosting Wins

When your prompt volume exceeds 50 million tokens per day, renting dedicated H100 or A100 GPU instances can cut your infrastructure bill by up to 70%.

Financial Crossover Point

• Under 5M Tokens/Day: OpenAI / Anthropic APIs ($10 - $50/day).

• Over 50M Tokens/Day: Dedicated vLLM GPU Server ($20 - $40/day fixed cost).

Estimate Server Power & Costs

Calculate GPU server electricity and compute costs with our free GPU Compute Estimator.