Doing the actual math on a $20k local AI rig breakeven

Everyone under the sun says "it's free after you buy the hardware" and skips the electricity bill.

Ran the numbers against a mid tier subscription to see where the crossover actually sits. Every thread about self hosting eventually has someone say some version of "once you own the hardware it's free forever," and every time I read that I think about my power bill. Electricity is not zero, and once you're running a card that pulls real wattage under sustained inference load for hours a day, that number adds up faster than I want to admit.

So I actually sat down and modeled it. Rough inputs: call it $20,000 for a serious rig, dual high end setup, enough RAM and VRAM to run something respectable at usable speed, and roughly $200 a month in incremental electricity from running it under load regularly. Compare that against a flat $200 a month subscription to a hosted option with no upfront cost at all.

The crossover point where the local rig actually becomes the cheaper option lands around month 27, over two years in. Before that point you are strictly worse off financially by every measure, you've just already spent the money so it doesn't feel that way anymore, which I think is exactly the trap. Sunk cost makes the ongoing electricity feel free even though it isn't, and it makes people report their setup as "free" once the hardware is paid off, ignoring that the hardware itself was the majority of the real cost (not to mention the RAM Apocalypse going on shooting prices up)

None of this accounts for depreciation, resale value dropping as newer cards release, the opportunity cost of that $20k sitting in chips instead of the stock market or the time cost of actually maintaining and troubleshooting a home server instead of just having something that works. Once you consider those , the real breakeven point pushes out even further than month 27. I still think there's a case for going local if privacy or offline access matters more to you than raw cost