Coding with LLMs (Claude Code, OpenAI Codex) is often presented as the ‘killer app’ for Generative AI. But looking at data, it seems the one piece of the puzzle missing is actual cost. …
LLM providers are SaaS providers, meaning that even if they were to give you the source of all the tools they use, there’s a fundamental limit to how much you can self host.
A better comparison would be Google giving away their indexed search data: you might be able to run an infinitesimal portion of it on your hardware, and will never ever match the results Google offers on their website, and since it’s a monopoly, you would be at a permanent disadvantage.
Same goes for all these AI companies. They are an oligopoly that give away subpar free models, compared to their cloud offerings. Self hosted LLMs will never stand a chance.
That’s not an accurate analogy.
LLM providers are SaaS providers, meaning that even if they were to give you the source of all the tools they use, there’s a fundamental limit to how much you can self host.
A better comparison would be Google giving away their indexed search data: you might be able to run an infinitesimal portion of it on your hardware, and will never ever match the results Google offers on their website, and since it’s a monopoly, you would be at a permanent disadvantage.
Same goes for all these AI companies. They are an oligopoly that give away subpar free models, compared to their cloud offerings. Self hosted LLMs will never stand a chance.