Self-hosting LLMs seems pointless—what am I missing?

Don’t get me wrong—I absolutely love self-hosting. If something can be self-hosted and makes sense, I’ll run it on my home server without hesitation.

But when it comes to LLMs, I just don’t get it.

Why would anyone self-host models like Ollama, Qwen, or others when OpenAI, Google, and Anthropic offer models that are exponentially more powerful?

I get the usual arguments: privacy, customization, control over your data—all valid points. But let’s be real:

• Running a local model requires serious GPU and RAM resources just to get inferior results compared to cloud-based options.

• Unless you have major infrastructure, you’re nowhere near the model sizes these big companies can run.

So what’s the use case? When is self-hosting actually better than just using an existing provider?

Am I missing something big here?

I want to be convinced. Change my mind.