LiteLLM vs a hosted gateway: when self-hosting stops being worth it

By the Zylo team · Updated June 5, 2026 · 5 min read

LiteLLM and a hosted gateway like Zylo solve the same problem — call many model providers through one OpenAI-compatible interface — but in opposite ways. LiteLLM is an open-source library and proxy you run yourself; a hosted gateway is a managed service. Here is when each makes sense.

LiteLLM: maximum control, you run it

• Self-hosted. You deploy and maintain the proxy, scale it, and keep it up.
• You hold every provider key. You still sign up with each provider and manage their keys, quotas and invoices.
• Great when you want full control, on-prem or VPC deployment, or custom routing logic, and you have the ops capacity to run it.

A hosted gateway: managed, one key, one bill

• No infrastructure. Nothing to deploy or keep online.
• One key, one balance, one invoice across providers, instead of N provider accounts.
• Built-in extras like web-extract for RAG and local payments.
• Great when you would rather ship than run a proxy, and you do not want to manage a key per provider.

When self-hosting stops being worth it

Self-hosting earns its keep when you need control it uniquely provides — strict data boundaries, custom routing, or on-prem. It stops being worth it when the proxy becomes one more service to patch, monitor and page someone for at 3am, and when juggling a key per provider outweighs the savings. At that point a managed, OpenAI-compatible gateway removes the ops burden without changing your code.

Either way, your code is portable

from openai import OpenAI

client = OpenAI(api_key="ZYLO_KEY", base_url="https://api.zyloai.net/v1")

response = client.chat.completions.create(
    model="claude-opus-4.8",
    messages=[{"role": "user", "content": "Hello from Zylo!"}],
)
print(response.choices[0].message.content)

Both speak the OpenAI format, so you can start on one and move to the other by changing base_url. See the gateway checklist and live pricing.