"How much will this cost?" 💸
This is the #1 question every CTO asks. And usually, the answer is "It depends."
But "it depends" doesn't pay the bills.
In this post, we are going to do the math. We will compare the costs of running a production AI app using AWS Bedrock, OpenAI, and Self-Hosted Open Source Models.
1. The "Token" Economy (Bedrock vs. OpenAI) 🪙
Most managed AI services charge by the "Token" (roughly 0.75 words).
The Heavyweights: GPT-4o vs. Claude 3.5 Sonnet
As of late 2024, these are the two kings.
| Model | Input Cost (per 1M tokens) | Output Cost (per 1M tokens) |
|---|---|---|
| OpenAI GPT-4o | $5.00 | $15.00 |
| Bedrock Claude 3.5 Sonnet | $3.00 | $15.00 |
The Verdict: Claude 3.5 Sonnet on Bedrock is cheaper on input.
If you are building a RAG app (where you send huge documents as input), Bedrock will save you ~40% on input costs.
2. The "Hidden" Costs of OpenAI 🕵️♀️
OpenAI is great, but for Enterprise, it has hidden costs:
- Data Privacy: If you need a private instance, "ChatGPT Enterprise" starts at ~$60/user/month with high minimums.
- Latency: You share the API with the world. During peak hours, it gets slow.
AWS Bedrock Advantage:
- Private by Default: Your data never leaves your AWS account. No extra "Enterprise" fee.
- Provisioned Throughput: You can reserve capacity to guarantee speed (expensive, but predictable).
3. The "Self-Hosted" Trap (EC2) 🪤
"Why don't we just run Llama 3 on our own servers? It's free!"
Spoiler: It is not free.
To run a decent model (like Llama 3 70B) fast enough for a chatbot, you need powerful GPUs.
- Instance:
g5.12xlarge(4x NVIDIA A10G GPUs) - Cost: ~$5.67 per hour (On-Demand)
- Monthly Cost: ~$4,082 per month
The Math:
- If you are a startup with low traffic, $4k/month is insane. You should use Bedrock (Pay-per-token).
- If you are a massive company processing billions of tokens 24/7, $4k/month might be cheaper than paying per token.
The Rule of Thumb:
Don't self-host until your Bedrock/OpenAI bill hits $5,000/month. Until then, the "Serverless" pay-per-token model is cheaper.
Summary: Which one should you pick? 🎯
- Bootstrapped Startup: Use AWS Bedrock (Claude 3 Haiku). It's blazing fast and dirt cheap ($0.25 per 1M input tokens).
- Enterprise RAG App: Use AWS Bedrock (Claude 3.5 Sonnet). Best balance of intelligence and data privacy.
- Massive Scale (Millions of users): Consider Self-Hosting on EC2/SageMaker to cap your costs.
Stop overpaying for AI. Do the math first.
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