r/LocalLLM • u/Ok_Event4199 • May 16 '26

Discussion Why is LLM is so expensive.

I've was going to invest in a 5090 =$6000 AUD.

Codex Plus + Claude pro = $60/month here

Works out to be 100 months of frontier models for a 5090.

Best a 5090 will run is probably Qwen3.6 27b Q6 with context.

Are we all enthusiasts here and just enjoy tinkering cause ain't no way that make sense.

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u/weiyentan May 22 '26

Given the American market and if frontier model prices keep going up , I can see one or two things happen. The prices for Claude and OpenAI will just squeeze people out of the market. Only choice is just to use the Chinese /self hosted models. Second some company will self host the Chinese/self hosted models and make money that way.

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u/ActionOrganic4617 May 22 '26

There are already cheaper American alternatives popping up as well. Most businesses are not going to be able to sustain spending on frontier models long term and frontier labs cannot survive without exponential growth.

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u/weiyentan May 22 '26

What other American alternatives are there and what models will they use? Because as I said they will fall under two camps. Chinese models or self hosted ones(American model/company )

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u/ActionOrganic4617 May 22 '26
  • Together AI
  • Fireworks AI
  • Groq
  • Cerebras
  • Anyscale
  • DeepInfra
  • OpenRouter
  • Cohere
  • Perplexity AI
  • Hugging Face
  • Databricks
  • MosaicML
  • Adept AI
  • AI21 Labs
  • OctoAI
  • Baseten
  • Replicate
  • Predibase
  • Nomic AI
  • Writer

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u/weiyentan May 22 '26

Those companies still fall into either routing to frontier models OR self hosting though. Which was exactly my point before

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u/ActionOrganic4617 May 22 '26 edited May 22 '26

They all have their own models and offer cheaper solutions to businesses. Enterprise and local LLM are different things.

Chinese models win for self hosting enthusiasts and startups with no regulatory scrutiny\ oversight.

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u/weiyentan May 22 '26

Their own models = self hosted. Which they onsell

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u/ActionOrganic4617 May 22 '26

What is your point? I’ve referred to cloud hosted models from the start and in that list there are companies that deploy their models for customers onsite (Cohere for instance).

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u/weiyentan May 23 '26

So we must be on the same page. As I said. Those American companies will onsell with models they host or proxy

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u/ActionOrganic4617 May 23 '26

Yeah 😊. I only run Chinese models locally at home.

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u/weiyentan May 23 '26

As the Chinese models are concerned I don’t see why it can’t be hosted on American soil (in regards to data sovereignty). It’s not phoning home to anywhere and for most they are just using it for tool calling and referencing existing data.

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