Cost per 1M Tokens: Phi-3 by GPU (Full Breakdown)

Why Phi-3 for Cost-Efficient AI

Microsoft’s Phi-3 models pack surprising quality into tiny packages. Phi-3 Mini at just 3.8B parameters outperforms many 7B models on reasoning benchmarks. For production workloads where cost efficiency matters most, Phi-3 on a dedicated GPU server delivers the absolute lowest cost per token of any capable model.

Running Phi-3 on even modest hardware like an RTX 3090 produces token costs so low they are essentially negligible. Here is the complete breakdown across every GPU configuration available at GigaGPU.

Phi-3 Mini (3.8B): Cost per GPU

Phi-3 Mini achieves $0.29 per 1M tokens on either the RTX 3090 or RTX 5090. That is the cheapest per-token rate you will find on any capable language model. For comparison, even the cheapest API (DeepSeek at $0.20/1M) is in the same ballpark, and you get zero rate limits, full privacy, and unlimited throughput with self-hosting.

See our cheapest GPU for AI inference guide and RTX 3090 vs RTX 5090 comparison for hardware details.

Phi-3 Small (7B): Cost per GPU

Phi-3 Small performs similarly to Mistral 7B and LLaMA 3 8B at the same price point. The choice between them comes down to task-specific benchmarks rather than cost. Use our cost per million tokens calculator to compare.

Phi-3 Medium (14B): Cost per GPU

Phi-3 Medium at 14B parameters punches well above its weight, approaching 30B-class quality on many tasks. At $0.89 per 1M tokens on an RTX 5090, it delivers excellent quality-per-dollar. Compare with Qwen 2.5 14B costs for a model of similar size.

Phi-3 vs Larger Models: When Small Wins

Phi-3 Mini offers the lowest absolute cost per token with quality that matches models twice its size. Phi-3 Medium offers the best quality-to-cost ratio in the sub-20B class. For tasks like classification, extraction, summarisation, and simple question-answering, smaller models often match larger ones. See our VRAM optimisation guide for choosing the right model size.

Best Use Cases for Phi-3

• High-volume classification: Phi-3 Mini at $0.29/1M handles intent detection, sentiment analysis, and routing at negligible cost.
• Edge-case pre-processing: Use Phi-3 to filter and route queries before sending complex ones to larger models.
• Budget chatbots: Phi-3 Medium handles most conversational tasks at under $1/1M tokens.
• Document extraction: Structured data extraction from forms, invoices, and reports.
• Code assistance: Phi-3 performs well on code completion and review tasks.

Deploy Phi-3 alongside larger models on the same server for a tiered inference architecture. Route simple queries to Phi-3 and complex ones to LLaMA 3 70B. Read the complete cost guide for architecture recommendations, and compare all models: DeepSeek, Qwen, Mistral.