Local LLMs Shift to Cost Routing

The strongest takeaway is that local models are not just a cheaper substitute for APIs; they are an operating model choice.

• –The post lands on a pragmatic middle ground: local for boring, repeatable, high-volume tasks; hosted frontier models for the hard calls.
• –It highlights the hidden drivers of spend that teams often underestimate: retries, long contexts, tool calls, evals, and embeddings.
• –The real question is not “local vs cloud,” but whether your routing policy is disciplined enough to send each task to the cheapest model that can still do the job.
• –The tradeoff is still real: local setups buy privacy, control, and sometimes better unit economics at scale, but they can add maintenance burden and lower reliability on tougher tasks.
• –The mention of Claude Code and Wozcode points to a broader pattern: model choice matters, but workflow architecture matters just as much.