If it is not a small fee, I do wonder - is there still advantage to having a provider which one may take out a lawsuit against if something goes wrong? To what extent might liability and security vetting by scaled usage still hedge against AI, in your view?
It’s generally a tradeoff decision between comparative advantage of a vendor versus {price cost and contracting cost}.
Contracting my cost is the difference in costs for a contract across companies versus a purely internal project. This could involve the lawyers on both sides, the time taken to negotiate which party is responsible for what deliverable / risk, the cost to enforce the contract, the time taken for negotiations/ iterations, etc.
One efficient company doing it internally is obviously efficient. Two inefficient companies negotiating a contract is obviously inefficient. The interesting questions are the other 2 quadrants, where the answer may change between the LLM case and non-LLM case.
Well in that case the provider is likely paying for insurance and charging you a mark up, so you could likely just buy the insurance and save the markup anyway.