diff --git a/docs/AI_PROVIDER_COMPARISON.md b/docs/AI_PROVIDER_COMPARISON.md
new file mode 100644
index 0000000..c8551ca
--- /dev/null
+++ b/docs/AI_PROVIDER_COMPARISON.md
@@ -0,0 +1,261 @@
+# AI Provider Cost & Quality Comparison
+
+## Provider Options for Inpainting/Image Editing
+
+### 1. OpenAI DALL-E 2 ❌ (Not Recommended)
+**Current implementation uses this when `AI_PROVIDER=openai`**
+
+**Pricing:**
+- $0.020 per image (1024x1024)
+- $0.018 per image (512x512)
+
+**Quality:** ⭐⭐ (2/5)
+- Old model (2022)
+- Significantly lower quality than DALL-E 3
+- Cannot match ChatGPT web interface
+- Often produces artifacts
+
+**Pros:**
+- Simple API
+- Fast responses
+
+**Cons:**
+- Poor quality by modern standards
+- Limited to 1024x1024 max
+- No access to DALL-E 3 inpainting
+
+**Verdict:** ❌ Don't use unless you need the cheapest option and quality doesn't matter
+
+---
+
+### 2. Stability AI (Stable Diffusion XL) ✅ (Good Choice)
+**Direct API to Stability AI**
+
+**Pricing:**
+- Credits-based system
+- ~$0.010 per image (512x512)
+- ~$0.040 per image (1024x1024)
+- Must buy credit packs ($10 minimum = 1000 credits)
+
+**Quality:** ⭐⭐⭐⭐ (4/5)
+- Excellent inpainting quality
+- Good at following prompts
+- Natural-looking results
+- Well-suited for photo editing
+
+**Pros:**
+- Built specifically for inpainting
+- Good quality-to-cost ratio
+- Reliable API
+- Fast generation (15-30 seconds)
+
+**Cons:**
+- Requires credit purchase upfront
+- Limited to SDXL models
+- Less flexible than Replicate
+
+**Verdict:** ✅ Best balance of quality and cost for direct API
+
+---
+
+### 3. Replicate ⭐ (Most Flexible)
+**API marketplace with multiple models**
+
+**Pricing:** Pay-per-second of GPU time
+- SDXL Inpainting: ~$0.0023/sec (~$0.01-0.03 per image)
+- Kandinsky 2.2: ~$0.0023/sec (~$0.01-0.02 per image)
+- LaMa (removal): ~$0.0005/sec (~$0.002 per image)
+- Varies by model and parameters
+
+**Quality:** ⭐⭐⭐⭐⭐ (5/5 - depends on model choice)
+- Access to multiple models
+- Can choose best model for each use case
+- Community models available
+- Often better than Stability direct
+
+**Pros:**
+- Multiple models to choose from
+- Pay only for what you use (no minimums)
+- Can use free models
+- New models added regularly
+- Fine-tuned models available
+
+**Cons:**
+- More complex to implement
+- Pricing varies by model
+- Need to understand different models
+
+**Best Models on Replicate:**
+- **SDXL Inpainting**: General purpose, excellent quality
+- **LaMa**: Best for object removal
+- **Kandinsky 2.2**: Good alternative to SDXL
+- **ControlNet Inpainting**: More control over results
+
+**Verdict:** ⭐ Most flexible, best value if you implement multiple models
+
+---
+
+### 4. Local Models (Self-Hosted) 💰 (Best Quality, No Per-Use Cost)
+
+**Pricing:**
+- $0 per image after setup
+- Requires GPU (RTX 3060 12GB minimum, RTX 4090 ideal)
+- Cloud GPU: $0.30-$1.00/hour (RunPod, Vast.ai)
+
+**Quality:** ⭐⭐⭐⭐⭐ (5/5)
+- Best possible quality
+- Full control over model selection
+- Can use latest open-source models
+- No API limitations
+
+**Setup Costs:**
+- GPU hardware: $300-$2000
+- OR Cloud GPU rental: $0.30-$1.00/hour
+
+**Pros:**
+- Unlimited usage once set up
+- Best quality available
+- Complete privacy
+- No API rate limits
+- Can fine-tune models
+
+**Cons:**
+- Requires GPU or cloud rental
+- More complex setup
+- Slower than cloud APIs (if CPU only)
+
+**Verdict:** 💰 Best long-term if you have GPU or high volume
+
+---
+
+## Stability AI vs Replicate: What's the Difference?
+
+### Stability AI (stability.ai)
+**What it is:**
+- The company that created Stable Diffusion
+- Direct API to their hosted models
+- Official source
+
+**Business Model:**
+- Buy credits upfront
+- Credits expire after 3 months
+- Official support
+- Guaranteed uptime SLA
+
+**Models Available:**
+- Stable Diffusion XL
+- Stable Diffusion 1.5
+- Their official models only
+
+---
+
+### Replicate (replicate.com)
+**What it is:**
+- Marketplace/platform for running ML models
+- Hosts models from many sources
+- Pay-per-use GPU time
+
+**Business Model:**
+- Pay only for GPU seconds used
+- No upfront purchase
+- No credits that expire
+- $0.01 minimum charge per prediction
+
+**Models Available:**
+- Stability AI's models (SDXL, SD 1.5)
+- Community models
+- Fine-tuned variants
+- Specialized models (LaMa, ControlNet, etc.)
+- 100+ image generation models
+
+**Think of it like:**
+- **Stability AI** = Buying directly from Apple
+- **Replicate** = App Store with many developers
+
+---
+
+## Cost Comparison Examples
+
+### Scenario: 100 edits per month
+
+| Provider | Cost per Image | Monthly Cost | Quality |
+|----------|---------------|--------------|---------|
+| DALL-E 2 | $0.020 | $2.00 | ⭐⭐ Poor |
+| Stability AI | $0.040 | $4.00 | ⭐⭐⭐⭐ Good |
+| Replicate (SDXL) | $0.025 | $2.50 | ⭐⭐⭐⭐⭐ Excellent |
+| Replicate (LaMa) | $0.002 | $0.20 | ⭐⭐⭐⭐ Good for removal |
+| Local GPU | $0.00 | $0.00* | ⭐⭐⭐⭐⭐ Best |
+
+*Requires $500+ GPU or $0.30-1.00/hr cloud GPU
+
+### Scenario: 1000 edits per month (Heavy use)
+
+| Provider | Monthly Cost | Notes |
+|----------|--------------|-------|
+| DALL-E 2 | $20.00 | Not worth it |
+| Stability AI | $40.00 | Need $10-40 credit refills |
+| Replicate (SDXL) | $25.00 | Pay as you go |
+| Local GPU | $0.00 | GPU pays for itself after ~50K images |
+| Cloud GPU (RunPod) | $20-60 | Depends on uptime needed |
+
+---
+
+## Quality Rankings for Inpainting
+
+**Best to Worst:**
+
+1. **Local SDXL Inpainting** ⭐⭐⭐⭐⭐ (self-hosted)
+2. **Replicate SDXL Inpainting** ⭐⭐⭐⭐⭐
+3. **Stability AI SDXL** ⭐⭐⭐⭐
+4. **Replicate LaMa** ⭐⭐⭐⭐ (for removal only)
+5. **DALL-E 2** ⭐⭐ (outdated)
+
+---
+
+## Recommendation by Use Case
+
+### Best for Testing/Development: Mock Provider
+- Cost: $0
+- Quality: N/A (returns original)
+- Use when: Building/testing UI
+
+### Best for Low Volume (< 100/month): Replicate
+- Cost: ~$2.50/month
+- Quality: ⭐⭐⭐⭐⭐
+- No minimum purchase
+- Multiple model options
+
+### Best for Medium Volume (100-1000/month): Replicate or Stability AI
+- Replicate: ~$25/month, more flexibility
+- Stability AI: ~$40/month, simpler API
+
+### Best for High Volume (1000+/month): Local GPU or Cloud GPU
+- Unlimited usage
+- Best quality
+- Full control
+
+### Best Overall Value: Replicate
+- No minimum purchase
+- Pay only for what you use
+- Best model selection
+- Easy to try multiple models
+
+---
+
+## My Recommendation
+
+Start with **Replicate** because:
+
+1. ✅ No upfront cost (vs Stability's $10 minimum)
+2. ✅ Better quality than DALL-E 2
+3. ✅ Can try multiple models to find what works
+4. ✅ Cheapest per-image for low-medium volume
+5. ✅ Can switch to Stability AI later if needed
+
+**Next Steps:**
+- I can add Replicate support (30 min of work)
+- Test with SDXL Inpainting first
+- Try LaMa for object removal
+- Fall back to Stability if needed
+
+Would you like me to add Replicate support?