Local vs Cloud AI
Compare the API bill with ownership, running costs and the time needed to recover hardware.
Method, assumptions and limits
Monthly API cost = requests/day × active days × (input tokens × input price + output tokens × output price) / 1,000,000. Include retries and background calls in request volume. Cache, batch, tools, subscription fees and tier discounts are not applied automatically. Enter the effective rates appropriate to your scenario.
Local running cost = whole-system active watts / 1,000 × active hours/day × the same active days × electricity price + upkeep. The machine is assumed off outside those hours and days. For idle or always-on equipment, refine the scenario in the server electricity calculator.
Payback = upfront hardware / positive monthly operating difference. If that difference is zero or negative, there is no operating payback. Zero hardware cost is handled separately. One-year cost includes purchase plus 12 repeated operating months; three-year cost uses 36 months and deducts resale only at the end.
Worked example and limits
The illustrative support workload costs $328.50/month in tokens and $40.04/month to operate locally. Its unrounded monthly difference gives about 6.93 months of simple payback on $2,000 hardware. The result is a cost scenario, not a measured capacity or quality comparison.
No automatic claim of equivalent answers, context, latency, uptime or throughput is made. Verify the model with the tested memory checker and run real workload benchmarks. Hardware replacement, tax, financing, depreciation, discount rates and unpredictable price changes are excluded. A positive difference is not guaranteed savings.
Sources and rate inputs
Check the official provider pricing documentation or your provider invoice and EIA electricity units. Method reviewed 11 September 2026; sample rates are not represented as current market prices.
FAQ
Does a cheaper local estimate mean equivalent performance?
No. Memory fit, response quality, latency, concurrency and uptime need independent tests. This page compares entered costs only.
Does the power estimate include idle consumption?
No. It assumes the system is off outside active hours and active days. Use the electricity planner for idle and always-on schedules.
How is resale used?
The entered hypothetical resale is deducted only at the end of the three-year total. It is excluded from the one-year total and simple operating payback.