Is Hosting Your Own LLM Cheaper than OpenAI? Hint: It Could Be
<h1><strong>Open AI Pricing</strong></h1>
<p>Open AI charges per token. 750 words are approximately 1000 tokens.</p>
<p>The price per token also depends on the model. For e.g.,</p>
<ol>
<li>GPT-4 (new) costs $0.03 (3 cents) per 1000 tokens</li>
<li>GPT-3.5 (older) costs $0.0015 (.15 cents) per 1000 tokens.</li>
</ol>
<p>Now, let’s see this pricing in action to extrapolate monthly costs for a sample application.</p>
<p>Take an example of an AI application that writes blog posts for users under 1500 words.</p>
<p>That means 1 blog post will cost a maximum of 6 cents using GPT-4 (the better model).</p>
<p>If your application is receiving a 1000 requests per day to write blog posts, you are looking at an average <strong>cost of approximately $1,000 per month*</strong></p>
<p>Now, let’s see how much this would cost hosting your own LLM on AWS.</p>
<h1>Host your own LLM Pricing</h1>
<p>Server type is the primary cost factor for hosting your own LLM on AWS. Different models require different server types.</p>
<p>If we choose the Llama-2 7b (7 billion parameter) model, then we need at least the EC2 g5.2xlarge server instance which costs approximately $850 month.</p>
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