Local AI

Local AI means running the model on hardware you control — a server in your building or private cloud — instead of sending data to a vendor's service. Tools like Ollama make this practical: capable open models now run well on ordinary business servers.

For an industrial manufacturer this is not a nice-to-have. Export-controlled drawings, defense-related specifications, and customer-controlled data simply cannot go to public consumer AI services. Local models give those workflows AI capability with zero data leaving your network — and no per-seat license fees.

The trade-off is honest: local models are smaller and less capable than the frontier cloud models, so the plan routes work by sensitivity — cloud models where data class allows, local models where it does not.

Where it shows up in this proposal: the AI by Department sheet marks every department whose work belongs on local models, and the chat assistant on this very site runs on one.