Comment by Chance-Device
4 hours ago
The absolute value of those numbers matters a lot. The cloud providers could be 100 times cheaper than running locally, but if it still costs say, 10 cents a day to run locally, you’re not going to care about this difference very much. And what you keep in privacy out-weighs the trivial savings afforded by the cloud provider.
I never said local models will disappear. There will be equilibrium. But excluding special applications where communicating with external servers is not an option, cloud is always going to be able to provide better inference for lower costs. That's structural.
> The cloud providers could be 100 times cheaper than running locally, but if it still costs say, 10 cents a day to run locally, you’re not going to care about this difference very much
For ad-hoc use, maybe not - but anyone running a business that's some form of pushing input through LLM to get output, will see costs proportional to use and error rate inversely proportional to quality, and they'll not be looking at it as "$0.1 isn't much", but "cloud lets me reduce costs 100x", and translate that to some mix of more volume, higher quality, and broader reach.
> And what you keep in privacy out-weighs the trivial savings afforded by the cloud provider.
That's even more niche than running LLMs on Martian robots. Most real privacy concerns are solved with contracts and audits. Individual ad-hoc use may lean more heavily towards local processing, but that's still a rounding error in overall use.