Mag / AI
Local LLM or cloud API? How to choose
Running a model on your own servers keeps data private but costs effort. A short guide to picking the right side.
Cloud models are the strongest available and need no hardware. Local models keep every byte inside your building. Most companies end up using both. The question is which jobs go where.
Choose local when
The data cannot leave the company for legal or contract reasons, the task is narrow and repeated (classification, extraction, summaries of internal documents), or you need the system to work without an internet connection.
Choose cloud when
The task needs strong reasoning, long documents or multiple languages at high quality, volume is low enough that per-request pricing is cheaper than a GPU server, or you need it working this week.
The hybrid pattern
A common setup routes sensitive or simple requests to a local model and sends the rest to a cloud API. A small router decides per request. You get privacy where it matters and quality where it counts.
