What AI costs a business depends on three things: how many people use it, how much they ask and which language model answers. The platform is rarely the biggest item.
So comparing AI costs isn't about "free versus expensive" but about which costs grow with your usage and which stay fixed. This post uses the example values from our AI cost calculator so you can follow every number yourself.
- The cost of AI on your own data consists of the language model, embeddings, the platform, infrastructure and operations, and the biggest moving item is almost always the language model.
- In RAGSuite Engine you pay a fixed plan price from €39 a month, with AI usage running on credits or your own API key; on your own server you pay for servers, operations and the model, per query via API or through hardware for a local one.
- Small teams usually start cheaper in RAGSuite Engine; with many queries, existing IT or confidential data, your own server pays off.
What makes up the cost of AI in a company?
AI on your own data, a RAG system, has five cost blocks. Who carries them depends on where the AI runs:
| Cost block | Grows with | RAGSuite Engine | Your own server |
|---|---|---|---|
| Language model | every query | credits in the plan or your own API key | per query via API, or hardware for a local model |
| Embeddings | documents and changes | credits in the plan or your own API key | via API or local, usually cents |
| Platform | team size | plan price per month | Community €0, Enterprise by agreement |
| Infrastructure | load and model size | included | your servers, with a GPU for local models |
| Operations | scope | with us | your team: updates, backups, monitoring |
Two blocks are easily missed in offers: operations, because nobody sends an invoice for them, and the language model, because it often only gets expensive after the pilot.
In shortFive blocks: model, embeddings, platform, infrastructure, operations. The model moves the most.
What does AI cost in RAGSuite Engine?
RAGSuite Engine is the hosted offer from RAGSuite, run by us in a data centre in Germany. You pay a fixed plan price per month, plus VAT: Starter €39, Business €169 and Premium €399 billed yearly (€45, €195 and €459 billed monthly). We take care of servers, updates, backups and monitoring.
The plans differ in seats, credits and storage. Business covers 20 users, Premium 50. A team of 20 therefore pays €169 a month billed yearly (€195 billed monthly), and a team of 40 pays €399 (€459 billed monthly), rather than a price for every extra seat. AI usage runs on credits that everyone in the workspace shares. With your own API key (BYOK) you pay the same plan price and use no credits.
All the details are on the pricing page. You can try the Starter plan free for seven days and with no credit card.
In shortA fixed plan price from €39 a month, AI usage via credits or your own API key; operations and servers included.
What does AI cost on your own server? A worked example
A company with 40 users asks 20,000 questions a month over 5,000 documents of 1,500 words each. Each query sends about 3,000 tokens of context to the model; the answer has 400 tokens. Model prices are example values from September 2026, converted at €1 = US$1.15.
The graphic above shows the result: with a large model via API, a query costs about 1.3 cents, so about €260 a month. A medium model costs about €36, a small one about €12. A local model costs no tokens, only your hardware.
Two things stand out. First, embeddings are almost always the smallest item. Second, the largest moving block depends on the choice of model, not the platform. So test whether a medium model is good enough for your questions before you pay for the largest one on every answer.
In shortLarge model about 1.3 cents per query, small about 0.06 cents: the model choice decides.
What happens as usage grows, and when does a local model pay off?
A pilot starts small. If the AI is good, more people ask more. That's exactly when the ways behave differently:
| Queries a month | Large model via API | Local model |
|---|---|---|
| 20,000 | €260 | server cost, fixed |
| 40,000 | €520 | server cost, fixed |
| 100,000 | €1,300 | server cost, fixed |
| 200,000 | €2,600 | server cost, fixed until the hardware is at capacity |
So calculate with usage in two years, not in the pilot. The threshold for a local model is simple: divide the monthly server cost by the model cost per query.
- €500 a montha GPU server for €18,000, depreciated over 36 months, without power
- ÷ 1.3 cents per querylarge model via API
- ≈ 38,000 queriesfrom here local beats the large model
- medium model: ≈ 276,000at 0.18 cents per query the threshold is far higher
The honest reading: against large models, a local model pays off at moderate usage; against cheap medium models, only at very high usage. A local model also isn't automatically as good as the largest one. The reason that often matters more than price: with a local model, confidential data doesn't leave your network.
In shortAPI costs grow with every query. Against large models, local pays off from about 38,000 queries a month.
What belongs in a fair AI cost comparison?
An honest comparison of total cost counts everything on both sides, including what doesn't fit into euros per month:
| Cost item | Cloud AI service | Your own server |
|---|---|---|
| Pricing basis | per user, per query or both | licence plus your costs |
| Usage above plan | quota, surcharge or plan change | no fee; a model via API you pay directly |
| Infrastructure | included in the price | your servers, with a GPU for a local model |
| Operations | with the provider | your team, plus power |
| Data protection | data processing agreement, vendor review | less review effort for the platform |
| Exit | export and move | data is already with you |
Every point ticked. Well prepared.
In shortCount operations, data protection and exit, and ask every offer five questions.
When is RAGSuite Engine cheaper, and when is your own server?
RAGSuite Engine is usually cheaper when a team wants to start quickly, nobody in-house should run systems and the content isn't strictly confidential. Servers, updates and backups fall away, and costs stay predictable with the plan price.
Your own server pays off when many people ask a lot, when confidential data calls for a local model, when you already have servers and an operations team, or when you need full control. Plan the operating effort honestly: how much time updates, backups and monitoring take depends on your environment.
With RAGSuite you don't have to commit forever. The Community Edition is open source and free, RAGSuite Engine starts at €39 a month with credits or your own API key, and Enterprise is available on request. All three use the same platform, so a later switch is a move.
Why your own server is more than a cost question is covered in Sovereign AI explained. All plans at a glance are on the pricing page.
All values are examples, not a quote. Your actual costs depend on model, provider, query pattern and infrastructure. All prices exclude VAT.
In shortRAGSuite Engine for a quick start, your own server for heavy use or confidential data.
Work through your own numbers, with the free AI cost calculator or in a call with Mihaela.
Frequently asked questions
What does AI cost a company per month?
It depends on users, queries and model. In the example with 40 users and 20,000 queries, a large language model via API costs about €260 a month and a small one about €12. Platform, servers and operations come on top. In RAGSuite Engine you pay a fixed plan price from €39 a month instead.
Is AI on your own server cheaper than in RAGSuite Engine?
It depends on usage and model. For small teams RAGSuite Engine is usually cheaper, because servers, updates and backups fall away. With many queries, large models, existing IT or confidential data, your own server pays off. Calculate with your usage in two years, not in the pilot.
What does RAGSuite Engine cost per month?
There are fixed plans: Starter €39, Business €169 for 20 users and Premium €399 for 50 users billed yearly, or €45, €195 and €459 billed monthly, all plus VAT. AI usage runs on credits or your own API key at the same plan price. Enterprise is available on request.
What does a server for a local language model cost?
Mainly it depends on the model's size, which sets the graphics memory you need. Get a quote for your model size, spread the price over its useful life and add power and operations. Enter that monthly value in the AI cost calculator and compare it with the API cost.
Which costs are often forgotten in the comparison?
With hosted AI services: surcharges above the quota, price rises at renewal, the data protection review of the provider, and the exit. On the own-server side: power, updates, backups and monitoring. A fair comparison counts both sides in full. All values in this post are examples, not a quote.
Sources
- RAGSuite: KI-Kosten-Rechner: example prices, method
- RAGSuite: Preise: plans
- EZB-Referenzkurse (Euro foreign exchange reference rates): USD to EUR conversion
Mihaela takes customers from installation to their first production project. She writes about operations, connectors and the cost of running AI in your own data centre.