LiteLLM is free, open-source software you run on your own infrastructure. You have full control, can customize everything, and pay $0 for the software itself. However, you pay for hosting, DevOps time, monitoring, and maintenance. Best for: teams with existing DevOps who want complete control.
AI Gateway is a managed service. No servers to maintain, no deployments, no monitoring setup. You get a URL and API key, and it just works. $99/month includes $5,000 usage budget, infrastructure, monitoring, and support. Best for: teams who want to ship fast without DevOps overhead.
While LiteLLM is free software, running it in production has real costs:
Infrastructure: $50-200/month (AWS/GCP compute + load balancer + database)
DevOps setup: 20-40 hours initial setup ($2,000-4,000 one-time at $100/hr)
Ongoing maintenance: 5-10 hours/month ($500-1,000/month)
Monitoring tools: $50-100/month (Datadog, Sentry, etc.)
Security updates: Ongoing time commitment
Total first year: $3,000 setup + $600-1,300/month = $10,200-18,600
Platform: $99/month
Usage budget included: $5,000/month
Setup time: 5 minutes
Maintenance: Zero
Monitoring: Built-in
Total first year: $1,188
| Feature | AI Gateway | LiteLLM |
|---|---|---|
| Multi-provider routing | ✓ | ✓ |
| Automatic failover | ✓ | ✓ |
| Budget caps | ✓ Built-in | Manual config |
| Usage budget included | ✓ $5,000/month | ✕ Pay providers directly |
| Setup time | 5 minutes | 20-40 hours |
| Hosting | ✓ Managed | Self-host required |
| Monitoring | ✓ Built-in dashboard | Set up yourself |
| Availability | High availability deployment | You're responsible |
| Custom code | ✕ SaaS only | ✓ Full control |
| Data residency control | US-based | ✓ Any region |
| Support | Email + docs | GitHub issues + community |
✓ You have a DevOps team with spare capacity
✓ You need full control over code and infrastructure
✓ You have specific data residency requirements (e.g., EU-only)
✓ You want to customize routing logic extensively
✓ You already have monitoring/logging infrastructure
✓ You're processing 50M+ tokens/month (economies of scale)
✓ You don't have DevOps resources or time
✓ You want to ship fast without infrastructure work
✓ You process 1-10M tokens/month (sweet spot)
✓ You want predictable, all-in pricing
✓ You prefer zero maintenance and guaranteed uptime
✓ You're a solo founder, small team, or agency
At what point does self-hosting LiteLLM become cheaper than AI Gateway?
Year 1: AI Gateway is cheaper ($1,188 vs $10,200+) due to setup costs
Year 2+: If ongoing DevOps costs drop to ~$200/month, LiteLLM = $2,400/year
vs AI Gateway = $1,188/year. AI Gateway still wins unless you're processing 20M+ tokens/month.
Conclusion: For most teams under 20M tokens/month, AI Gateway's managed service is more cost-effective when you factor in DevOps time and opportunity cost.
Try AI Gateway Free →