Buy vs. rent vs. build decision optimization is an eternal dilemma with only one universal answer: "It depends." Maximize wherever practicable and ethical:
I generally think there is a lot of good use for local models. Works like Lucy have a ton of potential to help drive tools, do basic reasoning. https://huggingface.co/Menlo/Lucy
But I think this week we are seeing a lot of extremely capable large models. DeepSeek V3 (670B) was joined by Kimi K2 (1T), and now Qwen3 Coder (480B). Trying to run these at home with any reasonable speed is very hard. Smaller models can be quite useful too but I feel like one absolutely wants to be able to tap these large models for a lot of core crucial work.
https://www.reddit.com/r/LocalLLaMA/
If your entire usecase is asking for a box to be turned on and nearly nothing else, sure. But I'm enjoying not having to think / care about app updates, migrations, ISP policies about hosting, etc. I'm glad to pay for someone else to do those things. Same like how I pay for someone to care about the email servers I use.
I'm afraid to host my web sites myself simply because I don't trust my ISP. It's rather reliable, but it does go down ~once a quarter, and relying on them would be highly inconvenient. Therefore, I have to choose between Hetzner vs VPS vs cloud (AWS, GCP, etc) vs colocation. After doing all the math and judging my ability to deal with hardware and software upgrades, at the end of the day hosting in the cloud isn't really that much more expensive and it's the least troublesome.
This all makes sense for personal projects, but if the fortune 500 you work for decides its cheaper to migrate to the cloud and give AI assistants to every developer, they decided to light their money on fire, and you should be happy to supply the gasoline and matches.
I've read a lot of blog posts making this same argument for a year "Cloud makes 80% margins! You're fool for paying them!" and I think they show a lack of curiosity as to why so few companies paying 9 figure cloud contracts feels incentivized. That's a huge incentive for a director looking to make their mark right?
In fact we have an example of a company that spent years moving off cloud - Dropbox - and the company has been stagnating since - so this isn't some "easy win".
If you talk to smart business leaders you'll hear the main 3 points come up over and over: cloud offers three huge advantages that are worth incredible margins to many companies:
1. Your business can scale existing or new workloads very quickly
2. It frees up organizational focus for your customer's problem
3. It's easier to hire cloud skills for than bare metal skills
You'll note that improvement on all of these are a trade of money for more time and lower risk. Put in those terms I hope it's not confusing why we continue to pay cloud provides.
But I think this week we are seeing a lot of extremely capable large models. DeepSeek V3 (670B) was joined by Kimi K2 (1T), and now Qwen3 Coder (480B). Trying to run these at home with any reasonable speed is very hard. Smaller models can be quite useful too but I feel like one absolutely wants to be able to tap these large models for a lot of core crucial work. https://www.reddit.com/r/LocalLLaMA/
But yeah, migrating the core business systems to cloud surely adds risk of lock-in, as well as juridical and geopolitical risks.
https://berthub.eu/articles/posts/how-tech-loses-out/
Even for a simple web site.
In fact we have an example of a company that spent years moving off cloud - Dropbox - and the company has been stagnating since - so this isn't some "easy win".
If you talk to smart business leaders you'll hear the main 3 points come up over and over: cloud offers three huge advantages that are worth incredible margins to many companies:
1. Your business can scale existing or new workloads very quickly
2. It frees up organizational focus for your customer's problem
3. It's easier to hire cloud skills for than bare metal skills
You'll note that improvement on all of these are a trade of money for more time and lower risk. Put in those terms I hope it's not confusing why we continue to pay cloud provides.