Calculate Open-Model TCO
Build a simple TCO comparison for a self-hosted open-source AI model.
A support team wants to replace a hosted API with a self-hosted open model for 12 million monthly requests. The first estimate compares an $18,000 API invoice with a $4,500 GPU rental and claims $13,500 savings. TCO = acquisition + setup + operation + maintenance + risk + exit The common shortcut is comparing hosted API invoices against only GPU rental. That ignores the people and operating costs that move inside the company. Normalize volume and horizon Set the comparison period to 90 days and annual run rate. Use the same request volume, latency target, uptime target, and data-retention assumptions…
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