Comment by nhecker

>And your own hardware stays available for non-AI related needs, while paying for these tokens would require you to address these needs separately in some way.

^ Fair. Yep, I agree the calculus changes if you don't have _any_ local hardware and you're needing to factor in the cost of acquiring such hardware.

When I did this napkin math, I was mostly interested in the energy aspect, using cost as a proxy. I was calculating the $/token (taking into consideration the cost of a KWh from my utility, the measured power draw of my M1 work machine, and the measured tokens per second processed by a ~20BP open-weight model). I then compared this to the published $/token rate of a frontier provider, and it was something like two orders of magnitude in favor of the frontier model. I get it, they're subsidizing, but I've got to imagine there's some truth in the numbers.

I wonder, does (or will) the $/token ratio fall asymptotically toward the cost of electricity? In my mind I'm drawing a parallel to how the value of mined cryptocurrency approximately tracks the cost of electricity... but I might be misremembering that detail.