[jillesvangurp]

The issue with on premise is under utilization and the fact that you need more than just the hardware. You end up buying more hardware than you need and inevitably a portion of it will just sit there idling and depreciating in value. And you don't just need hardware but also investments in your building. GPUs generate a lot of heat. So, you need to get rid of that heat and make sure you beef up your power infrastructure to be able to handle the load. It's not just the GPUs that you pay for. And the equipment is expensive. So you need to invest in security as well.

Cloud pricing is pretty steep and obviously has a fat profit margin but building your own data centers isn't cheap either. Doing this at scale is not something most companies would be very good at either. Which means it probably is quite a bit more expensive relative to what the big cloud providers are doing.