ipapapa

The Cost Formula

Total Cost = (Input Tokens × Rate_in) + (Output Tokens × Rate_out) + Rerank Fee

For our standard 6,100-token turn (5,300 input / 800 output):

• Gemini Input: 5,300 tokens × $0.50/1M = $0.00265
• Gemini Output: 800 tokens × $3.00/1M = $0.00240
• Cohere Rerank: 1 search × $0.002/req = $0.00200
• Total Pipeline Cost: $0.00705 / query

ipapapa

Table 1: CPU RAG Benchmarks (The "Death Spiral")

Hardware	Model	RAG Response Time	Verdict
2 vCPU	Qwen 4B	~15–18 mins	💀 System Failure
4 vCPU	Qwen 4B	~10–12 mins	💀 System Failure
8 vCPU	Qwen 8B	~7–10 mins	💀 System Failure

ipapapa

Table 2: Accuracy Benchmarks (Ground Truth Test)

Model	Context Window	Accuracy	Issues
Gemini 3.0 Flash	1M+	100%	Perfect citations. Identified all items.
Qwen 3 (H100)	131k	71%	Missed 2 valid items.
Qwen 3 (H100)	4k	29%	Severe hallucinations.

ipapapa

Table 3: The Final Verdict

Metric	Local H100	Gemini 3.0 Flash	Winner
Response Time	45 seconds	2 seconds	☁️ Cloud
Accuracy	71%	100%	☁️ Cloud
Break-Even Volume	> 16,000/day	N/A	☁️ Cloud

ipapapa

Cost Analysis: Managed API vs. Rented H100

Metric	Managed Architecture (Gemini 3.0 Flash + Cohere)	Rented Infrastructure (DigitalOcean H100 Droplet)
Billing Model	Pay-as-you-go (Utility)	Fixed Hourly (Subscription)
Model Cost	$0.50 / 1M input | $3.00 / 1M output	~$2,440.00 / month ($3.39/hr)
Retrieval Cost	$2.00 / 1k queries (Cohere Rerank)	$2.00 / 1k queries (Cohere Rerank)
Cost per Query	$0.00705	$0.00200 (Retrieval only)
Daily Floor Cost	$0.00 (Pay only for what you use)	$81.36 (Assuming 24/7 uptime)
Break-Even Point	—	~16,110 Queries / Day

ipapapa

def calculate_break_even():
    """
    Calculates the volume of queries needed to justify renting an H100
    vs. using Gemini 3.0 Flash API.
    """
    
    # 1. Fixed Infrastructure Costs (Monthly)
    h100_server_cost = 2440.00 
    
    # 2. Variable Costs per Query