alt Hacker NewsI suppose I was thinking in terms of companies that already had a slew of hardware and are just missing external GPU's, FPGA's or whatever people are using these days. A company might have a $50MM budget for tokens but could save a chunk of that using their existing hardware with some modifications.
Maybe that makes sense if the company already bought the hardware.
But I currently think the fundamental reason the cloud models often make more sense is based in how the models work. My current understanding is that once these models are loaded into GPU memory, the model can respond to multiple prompts in parallel. So a cloud vendor that receives lots of user prompts at the same time can achieve really good hardware utilization. These cloud vendors can then spread the cost of the hardware over many more users than you can with a local model, leading to lower prices per prompt in the cloud.