Self-hosted AI rig breakeven: 27 months vs $200/mo subscriptions

A detailed analysis by Reddit user u/shyaaaaaaaaaaam challenges the popular notion that self-hosting AI hardware is "free forever" after purchase. By modeling a $20,000 rig with dual high-end GPUs and sufficient VRAM, they estimate an incremental $200/month electricity cost under sustained inference load. Comparing that to a $200/month hosted AI subscription, the breakeven point lands at month 27—over two years of ownership before the local setup becomes cheaper. Before that, every month is a net loss, but sunk-cost bias makes the ongoing electricity feel negligible.

Beyond raw electricity, the analysis flags hidden costs: hardware depreciation (new GPU releases tank resale value), opportunity cost of $20k not invested, and the time cost of maintaining a home server. These factors push the real breakeven further out. The post concludes that the only strong arguments for self-hosting are privacy and offline access—financial savings are a myth for most users. The post, cross-posted to r/LocalLLaMA, has sparked debate about the true economics of local vs. cloud AI.