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API cost rises with usage, while owned infrastructure stays close to addressed

2 min read

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dharma_fig1_cost_curve (1)

That shift turns the GPU into infrastructure rather than a line item, sized for growth, sized for demand peaks, and therefore sized above what any given week needs.

Key facts

Summary

The reason is structural. An aircraft's costs accrue by the calendar hour: financing, depreciation, hull insurance, scheduled maintenance, crew contracts. A bigger fleet still helps. Enterprise AI is running into the same structure, on a different piece of hardware. A GPU accrues cost by the calendar hour too, through financing, depreciation, power, and cooling, whether or not it's doing anything useful in a given moment. More GPUs helps in roughly the way a bigger fleet helps an airline: real capacity, a genuine advantage, and still no guarantee of the result that decides who wins. The first wave of enterprise AI was won on model quality. GPUs are expensive, supply constrained, and in demand far beyond what's available, and this holds even at the top of the market.

Read full article at Hugging Face →

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