Local LLM vs cloud AI: cost, privacy and latency compared

Cost: compare the whole bill

• Cloud: price per token or request, times your expected volume, plus any minimum commitments.
• Local: hardware, power, hosting, staff time to run and patch it, and the cost of replacing it.
• A local deployment pays off when use is steady and high; a cloud service often wins when use is low or spiky.

Privacy

• Local keeps prompts and documents inside your boundary.
• Cloud can still meet strict needs through contracts and regional options; read the terms.

Latency

• Local removes a network round trip but is limited by your hardware.
• Cloud offers more powerful models but adds network time and can queue under load.

How to compare

1. Pick a realistic task and 50 real examples.
2. Run both options and score quality.
3. Measure time to first token and total time.
4. Cost out a month of expected use for each.

IICTP is a new independent credential and is not ISO/IEC 17024 accredited.