The Economics of Self-Hosting Llama-3

Every CTO asks me: “Should we host our own models to save money?”

The answer is almost always No.

The Math

Let’s look at Llama-3 70B. To run this at decent speed (FP16), you need about 140GB of VRAM. That means 2x A100 80GB cards.

• Cloud GPU Cost: ~$4.00 / hour on typical providers.
• Monthly Cost: $2,900 / month (running 24/7).

Token Equivalent

At current API provider rates (~$0.70 / 1M tokens), that $2,900 buys you 4 Billion Tokens.

The Break-Even Point

Unless your application is processing 4 Billion Tokens per month, you are losing money by self-hosting.

The Exception: Privacy & Fine-Tuning

The only valid engineering reasons to self-host in 2026 are:

1. Privacy: Zero data can leave your VPC (Medical/Legal).
2. Fine-Tuning: You are running a custom LoRA adapter that isn’t supported by public APIs.

Do not self-host for cost. You will lose.