Same answers.
Different trust.
Cloud AI is operated by a third party on infrastructure you don't control. Local AI runs on infrastructure you own. For organisations handling sensitive, regulated, or confidential data, where the model runs is the deciding factor.
Dimension
Local · on-prem
Cloud · API
Where data lives
→In your building. Always.Never transmitted
On a vendor's servers, often abroad.Cross-border transfer
Cost model
→One-time hardware + setup.No per-token bill
Pay per token, every request, forever.Scales with usage
Compliance
→Air-gappable. Audit-friendly.Health · legal · finance
Depends on the provider's terms & region.Shared responsibility
Connectivity
→Operates fully offline.No internet required
Requires a live connection per request.Dependent on provider uptime
Control
→You own the model & the box.No silent changes
Model can change or retire without notice.Vendor's roadmap
Best suited to
→Privacy and predictable cost.Steady, sensitive workloads
Access to the absolute frontier model.Variable, non-sensitive tasks