About this Local LLM Hardware Break-Even Calculator
Local LLM economics depend on hardware cost, useful life, utilization, electricity, maintenance, and the hosted API spend you can actually replace.
Who this calculator is for
- AI infrastructure teams comparing hosted and local inference.
- Founders planning GPU purchases.
- FinOps teams evaluating self-hosted LLM workloads.
When to use it
- Estimate hardware payback period.
- Compare monthly hosted API cost with local operating cost.
- Model partial migration to local inference.
How to use this calculator
- Enter current hosted API spend and replaceable percentage.
- Enter hardware purchase cost, useful life, residual value, and monthly operating costs.
- Review monthly savings and break-even months.
Key assumptions
- Quality, latency, staffing, security, and model maintenance are not monetized unless included in monthly costs.
- Hosted prices and local costs are user-entered.
- No usage details are uploaded.
Accuracy and testing
Review formula sources, default test cases, assumptions, unit handling, rounding rules, and changelog for this calculator.
How this calculator works
Avoided hosted cost = hosted monthly spend x replaceable percent. Local monthly cost = amortized hardware cost + electricity + maintenance + hosting. Break-even months = upfront net hardware cost / monthly savings.
Avoided hosted cost = hosted monthly spend * replaceable percent. Local monthly cost = amortized hardware net cost + electricity + maintenance + hosting. Break-even months = net hardware cost / monthly savings.
Inputs explained
Hosted spend
Monthly API spend that might be replaced by local inference.
Replaceable percent
Share of hosted workload suitable for local models.
Local costs
Hardware amortization, power, maintenance, colocation, cooling, and administration.
Understanding your results
Break-even is only meaningful when monthly savings are positive. If savings are negative, hosted inference is cheaper under these assumptions.
Example scenarios
GPU workstation
A $12,000 hardware purchase replacing $2,500/month of hosted spend can break even quickly if operating costs and model quality are acceptable.
Key Features
- Instant Calculation
- Private & Secure
- Mobile Optimized
Tips & Best Practices
- Only count workloads local models can handle well.
- Include engineer time and monitoring in maintenance cost.
- Run sensitivity scenarios for utilization and hardware life.