Local AI (On-Premise AI)
Local AI (on-premise AI) refers to AI models that run on a company's own hardware instead of in an external provider's cloud – using tools such as Ollama, for example – so that data never leaves the company's own network.
In practice
Local AI suits companies with sensitive or personal data that do not want to involve a cloud provider abroad, or that have clear data residency requirements. The trade-off: local models are usually smaller and demand more in-house expertise than the cloud AI services of the large providers.