Local AI means tasks run on your hardware. Cloud AI means everything runs through an external provider. Most businesses are best served by a hybrid setup: tasks run locally, with language processing handled by a chosen provider. This article compares the options fairly.
Local AI means the AI environment, including projects, knowledge, configuration, and task execution, runs on a system at your location. You control the hardware, access, and data.
At Voltti, the Hermes environment runs locally. That does not mean everything is offline: it can use an external model for language processing. Read more on our page about local AI for businesses.
Cloud AI means everything runs through an external provider: ChatGPT, Copilot, or another SaaS solution. You send your question to the cloud and receive an answer. The provider determines where your data is processed.
| Feature | Local AI | Cloud AI |
|---|---|---|
Where data is processed | At your location | At the cloud provider |
Control over task execution | Full | Limited to provider settings |
Access to your systems | Yes, within your network | Only through cloud connections |
Hardware required | Yes | No |
Cost model | Installation + support | Usage-based / subscription |
Suited to | Businesses with recurring work | Ad hoc questions without integration |
Hybrid AI is the practical middle ground: the environment runs locally, but language processing can use an external provider. This is the setup we use most often at Voltti.
You decide which data goes to the provider. Task execution, projects, and knowledge stay local. Read more about security and privacy.
Choose cloud AI if you only ask occasional questions and do not need an integrated work environment. Choose local or hybrid AI if you want the agent to work with your projects, use your tools, and operate within your boundaries.
Read more about the difference between an agent and a chatbot in our article on AI agents vs. chatbots.
Not necessarily. At Voltti, the environment runs locally, but language processing can use an external provider. That is called hybrid AI. A fully offline setup is possible but requires powerful hardware.
Not necessarily, but you have less control. Your data leaves your environment through the provider. With local AI, tasks run on your hardware. You decide what to send to a model provider.
Yes. This setup lets you switch model providers. If your use case and hardware justify it, we can add a local model.
Not necessarily a server: a capable computer is enough for the standard setup. Running a local language model calls for a GPU in the setup described here.
