AI Margin Moat & Open-Weight TCO Simulator

Proprietary API Token Markups vs. Self-Hosted Inference Economics
Proprietary Monthly
$82,500
$2,750 / day blended
Self-Hosted Hardware
$17,280
1x 8x H100 SXM ($24/h)
Total Self-Hosted TCO
$27,780
Hardware + Ops + Fine-tuning
Net Monthly Savings
$54,720
$656,640 / year arbitrage
Margin Erosion
66.33%
Cost compression delta
Switching Break-Even
218.87M
Daily tokens threshold

Cost vs. Daily Volume Sensitivity

Proprietary API Open-Weight Cluster Break-Even

Monthly TCO Structure Breakdown

API Markup GPU Hardware Ops & Fine-Tune
Strategic Moat Analysis: At 650.0M tokens/day, proprietary API spend reaches $82,500/mo ($2.75K/day). Deploying a self-hosted open-weight cluster consumes $27,780/mo all-in ($17.28K GPU + $10.50K Ops/Eval), yielding $54,720/mo in margin arbitrage (66.33% erosion). Switching pays off once daily volume exceeds 218.87M tokens.
Blended API Cost: $4.23 / 1M tok
Self-Hosted Unit Cost: $1.42 / 1M tok
Effective Cluster Cap: 155.5M tok/day/node
Infra Utilization: 418.0% (multi-node scaled)
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