Category: Benchmark

GPU Infrastructure Cost Analysis: Cloud vs On-Prem

Financial and architectural analysis showing when on-premise GPU clusters outperform cloud from both cost and sovereignty perspectives.

Executive Summary

This analysis compares the total cost of ownership (TCO) for GPU infrastructure between cloud-based and on-premise deployments. Our findings indicate that for sustained AI workloads, on-premise deployment can deliver 40–60% cost savings over a 3–5 year period.

Methodology

Time horizons of 3 and 5 years
Training, inference, and mixed workloads
NVIDIA A100 / H100–class GPUs
Multiple utilisation scenarios (25–100%)

Cloud Cost Analysis

Instance costs on AWS, Azure, GCP
Storage and egress charges
Support and premium SLAs

On-Premise Cost Analysis

Hardware acquisition (e.g. DGX A100/H100)
Power, cooling, and space
Operations and maintenance
Depreciation and lifecycle

Key Findings

Break-even typically around 40–50% utilisation over 3 years
At high utilisation, on-premise can save hundreds of thousands of dollars
Data sovereignty and predictability are major non-financial advantages

Recommendations

Choose **on-prem** when:

Workloads are predictable and sustained
Data sovereignty is required
Long-term AI strategy is defined

Choose **cloud** when:

Workloads are highly variable
Projects are experimental or short-term
Rapid global scaling is required

Conclusion

For enterprises with sustained AI workloads and sovereignty requirements, on-premise GPU infrastructure often delivers superior economics and control compared to public cloud–only strategies.

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