As someone who has worked in two industries that are at the maximal end of data sensitivity and privacy this comes across as a tinfoil hat issue not a real business requirement. In such cases we've always found ways to trade dollars for the privacy we need without having to run our own inference at excruciating slow speeds.
There are regulated sectors in countries where data sovereignty is important enough that the sector sticks to air-gapped on-prem hardware and does not use cloud services at all. They have the dollars to pay for more than what it would cost to run on the Cloud.
Interesting. So nobody would have had a problem with you running stuff on Chinese AI providers?
I have some inference I simply don't want to run on OAI, Anthropic, or Google because I don't want to run afoul of their "rules" and end up with a banned account, and this situation is only getting worse when it comes to doing fairly basic tasks like trying to secure your app against security problems.
Having worked in / adjacent several such industries, a lot of the question depends on scale.
A trillion-dollar business can easily trade dollars for the privacy. A business with $1M to spend won't even get a phone call with OpenAI or Anthropic, who were the only* previous players in town for doing this.
Worst-case example: Bootstrapped startup working in military.
It's also the case that an open model enables many more intermediate-cost solutions. E.g. providers certified for specific applications, on-prem rentals, etc.
* Omitting Azure, which gives some privacy for some $$$ on their models, but not at the level of high-security.
Do you mean by trading dollars for the privacy you need as:
a) Contracting with a third-party independent inference provider who will run your choice of model on fast hardware that they own, with all appropriate data security/privacy/contractual/compliance protection in place
or
b) Contracting with the original creators of the model to run inference via their API and with assurances that all the same data protection is in place
or
c) Spending the money to buy your own inference hardware to run it on something you fully own/control at proper usable speeds?
Edit: Everything I've been writing in this thread is mostly within the context of being able to evaluate K3 and its usefulness to be self-hosted as a preliminary proof of concept or test of feasibility of a new thing, such as on <$20,000 of server hardware, before proceeding to spend 300-400k on GPU-related hardware, or external third party services/ongoing billing.