BlogAI Economics
AI Economics11 min read

GPU Infrastructure Economics: Build, Rent, or Cloud?

The GPU cost decision matrix every AI team needs. On-prem vs. cloud vs. hybrid analysis.

By Richard Ewing·

The GPU Decision Matrix

On-prem GPUs: $30K-$200K upfront, low marginal cost, 18-24 month payback. Cloud GPUs: $0 upfront, $2-4/hr for A100, instant scaling. Spot instances: 60-70% cheaper but unreliable.

Rules of thumb: If utilization <40%, cloud wins. If >70%, on-prem wins. 40-70% is the gray zone where hybrid makes sense. Always model 18-month TCO, not monthly cost.


AI economics calculator →

Like this analysis?

Get the weekly engineering economics briefing — one email, every Monday.

Subscribe Free →

More in AI Economics

Published Work

This article expands on ideas from my published work in CIO.com, Built In, Mind the Product, and HackerNoon. View published articles →

📊

Richard Ewing

The Product Economist — Quantifying engineering economics for technology leaders, PE firms, and boards.