Why Self-Hosting AI Models Is a Bad Idea

A cost analysis arguing against self-hosting large language models. Running frontier open-weight models like Kimi K2.5 requires 4-16 Nvidia H100 GPUs, costing $8,000-$35,000/month in cloud rentals or $150,000-$300,000+ in the first year for owned hardware. By contrast, API access to the same models costs $300-$800/month — 10 to 30 times cheaper. Even smaller models on consumer hardware take years to recoup API savings. The piece also warns that 'open weight' is not 'open source': licenses like Llama's have real restrictions and can change at any time. The recommendation is to use cheap vendor APIs while AI companies are subsidizing costs with VC and government money, avoid lock-in by staying provider-agnostic, and only consider self-hosting in special cases like air-gapped environments or massive existing GPU infrastructure.