On-Demand vs Spot GPUs: How Teams Should Actually Decide Where to Run AI Inference
As GPU cloud capacity tightens and demand surges — highlighted by Amazon crossing a $3 trillion valuation partly on AI cloud growth — teams running AI inference face a critical cost decision between on-demand and spot GPU instances. While spot instances can cost 60–70% less than on-demand, they carry the risk of sudden interruption, making the headline discount misleading without accounting for workload type. A practical framework categorizes workloads into three buckets: batch jobs that can checkpoint and resume safely on spot, real-time inference behind load balancers that can tolerate spot only with careful multi-zone engineering, and latency-sensitive user-facing services that require the reliability of on-demand pricing. Hidden costs such as model cold-start times, the on-demand baseline most teams still maintain, and the engineering effort to manage spot fleets further erode the apparent savings. The key takeaway is that blended cost modeling — not the best-case spot discount — should drive GPU provisioning decisions.
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