Lesson 1776 of 2116
AI Tools: Decide Between Local Models and Hosted APIs With a Real Workload
Local models are cheaper at scale and private by default; they are also slower, narrower, and require ops. Decide on the workload, not the principle.
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What this lesson covers
Learning path
The main moves in order
- 1The premise
- 2local LLM
- 3hosted API
- 4TCO
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Terms to connect while reading
Section 1
The premise
Local LLMs make sense for narrow, high-volume, privacy-bound tasks; hosted APIs win for broad capability, fast iteration, and infrequent use.
What AI does well here
- Score the workload on volume, capability needs, and privacy requirements
- Estimate hardware and ops cost honestly
- Recommend a hybrid where appropriate
- Plan a fallback when the local model is wrong
What AI cannot do
- Predict model quality on your data without testing
- Account for your team's ops skills
- Eliminate the ongoing maintenance of local infra
Key terms in this lesson
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