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I would pay for a service like this, but $1 per image is too much. Does it really cost that much to run the neural network and create 1 image?

It's surprisingly expensive to compute, not quite $1 but after stripe fees it's not far off. I'm looking at ways to bring the compute cost down.

I use Coreweave Cloud for NightCafe Creator (essentially the same service as you, but more mature). Check it out.