Run AI Locally

Run AI Locally

Ollama & LM Studio Complete Guide 2026

TL;DR

What is Run AI Locally?

Local AI refers to running large language models (LLMs) on your own computer instead of using cloud services. Tools like Ollama and LM Studio make it easy to run models like Llama, DeepSeek, and Mistral locally with complete privacy and no subscription costs.

Why Run AI Locally?

Here's the thing - running LLMs locally gives us complete control over our AI experience - privacy, no subscription costs, and offline functionality. In 2026, local AI is no longer just for techies; tools like Ollama and LM Studio make it accessible to everyone.

Benefits of Local AI

  • 100% Privacy - Our prompts never leave our machine
  • No Subscriptions - Free to use after setup
  • Offline Access - Works without internet
  • No Rate Limits - Use as much as we want
  • Full Control - Customize models, parameters, everything
  • No Censorship - Many local models are less restricted

Who Benefits from Local AI?

  • Privacy-conscious developers - Keep sensitive data local
  • Builders - Create apps without API costs
  • Researchers - Experiment without limits
  • Remote workers - Use AI anywhere, even offline
  • Budget-minded teams - Eliminate ongoing subscriptions
2026 Reality: Turns out, tools like LM Studio and Ollama have made local AI as easy as installing a regular app. No command line expertise required.

Ollama: The Developer's Choice

In my view, Ollama is the most popular tool for running LLMs locally, especially among developers. It's command-line based but incredibly simple - exactly how we like it.

Installation

macOS / Linux

# One-line install
curl -fsSL https://ollama.com/install.sh | sh

Windows

Download the installer from ollama.com/download

Running Your First Model

# Download and run Llama 3.2 (8B)
ollama run llama3.2

# Or run DeepSeek Coder for programming
ollama run deepseek-coder:6.7b

# Or run Mistral for general tasks
ollama run mistral

Popular Models for Ollama

  • llama3.2 - Meta's latest, great all-rounder (8B/70B)
  • deepseek-coder - Excellent for coding (6.7B/33B)
  • mistral - Fast and capable (7B)
  • codellama - Code-focused Llama variant
  • gemma2 - Google's efficient model
  • phi3 - Microsoft's small but capable model

Using Ollama with Our Apps

# Python example with OpenAI-compatible API
from openai import OpenAI

client = OpenAI(
    base_url="http://localhost:11434/v1",
    api_key="ollama"  # Can be any string
)

response = client.chat.completions.create(
    model="llama3.2",
    messages=[{"role": "user", "content": "Hello!"}]
)

print(response.choices[0].message.content)

Useful Ollama Commands

# List downloaded models
ollama list

# Pull a model without running it
ollama pull llama3.2

# Remove a model
ollama rm llama3.2

# See model info
ollama show llama3.2

# Run as a server
ollama serve
Pro Tip: The exciting part is that Ollama's API is OpenAI-compatible, so any app that works with ChatGPT API can work with Ollama by just changing the base URL. This makes migration super smooth.

LM Studio: The Beginner-Friendly Option

LM Studio provides the most polished graphical interface for running local LLMs. Here's the thing - if we want to avoid the command line, this is the best choice.

Installation

  1. Go to lmstudio.ai
  2. Download for your operating system
  3. Install like any normal application
  4. Launch and start exploring models

Downloading Models in LM Studio

  1. Click the "Search" tab (magnifying glass icon)
  2. Search for a model (e.g., "llama", "deepseek", "mistral")
  3. Choose a quantization level based on your RAM
  4. Click "Download"

Understanding Quantization

Models come in different sizes (quantization levels):

  • Q4_K_M - Best balance of size/quality (recommended)
  • Q5_K_M - Slightly better quality, larger
  • Q8_0 - Near-original quality, much larger
  • FP16/FP32 - Full precision, very large

RAM Requirements

8GB RAM:
• 7B models (Q4)
• Mistral 7B
• Llama 3.2 8B
16GB+ RAM:
• 13B models
• 33B models (Q4)
• Multiple models loaded

Features

  • Chat Interface - Beautiful UI for conversations
  • Model Library - Browse and download models easily
  • Local Server - Run as OpenAI-compatible API
  • Preset Management - Save and share configurations
  • JIT Loading - Models load on-demand

Running as a Server

  1. Go to the "Local Server" tab
  2. Select our model
  3. Click "Start Server"
  4. Use the API at http://localhost:1234/v1
In My View: Start with Llama 3.2 8B Q4_K_M - it's the best balance of quality and speed for most of us. Absolutely solid starting point.

Best Local Models in 2026

Let me share the top models for running locally, ranked by use case based on my testing:

General Purpose

  • Llama 3.2 (8B/70B) - Meta's latest, excellent all-around
  • Mistral (7B) - Fast, capable, great for chat
  • Gemma 2 (9B/27B) - Google's efficient model

Coding

  • DeepSeek Coder (6.7B/33B) - Excellent code generation
  • CodeLlama (7B/13B/34B) - Meta's code-focused model
  • Qwen2.5-Coder - Strong multilingual coding

Creative Writing

  • Llama 3.2 - Good creative output
  • Mistral - Natural, flowing text
  • Mixtral (8x7B) - Mixture of experts, very capable

Reasoning & Math

  • DeepSeek R1 (distilled versions) - Chain-of-thought reasoning
  • Qwen2.5-Math - Specialized for math
  • Llama 3.2 - Good general reasoning

Small & Fast (8GB RAM)

  • Phi-3 Mini (3.8B) - Microsoft's efficient model
  • Gemma 2 (2B) - Google's tiny model
  • Llama 3.2 (3B) - Meta's small model

Model Comparison

Cloud AI (ChatGPT):
• Higher quality
• Requires internet
• Costs money
• Data sent to servers
Local AI (Llama 3.2):
• ~80-90% quality
• Works offline
• Free after setup
• Fully private

Local AI Use Cases

Let me share some practical ways we use local AI in our daily work:

1. Private Document Analysis

Analyze sensitive documents without uploading them:

  • Legal documents
  • Medical records
  • Financial statements
  • Proprietary business data

2. Offline Development

Build AI features without internet dependency - this is huge for us:

  • Code completion
  • Code review
  • Documentation generation
  • Bug hunting

3. Creative Writing

Write without censorship or data collection:

  • Fiction writing
  • Brainstorming
  • Personal journaling
  • Content creation

4. Learning & Experimentation

  • Learn AI/ML concepts hands-on
  • Fine-tune models on custom data
  • Experiment with prompts without limits
  • Build prototypes quickly

5. Home Automation

  • Voice assistants that stay local
  • Smart home integrations
  • Personal AI butler

Example: Private Code Review

# Start Ollama with DeepSeek Coder
ollama run deepseek-coder:6.7b

# In the chat, paste our code:
> Review this code for security issues and suggest improvements:
> [paste our proprietary code]

# Our code never leaves our machine!
Bottom Line: Any task involving sensitive data - personal, medical, financial, proprietary - is a perfect use case for local AI. This is where it really shines.

Hardware Requirements

What hardware do we need for local AI? Here's a realistic guide based on my testing:

Minimum (Basic Usage)

  • RAM: 8GB
  • GPU: Not required (CPU works)
  • Storage: 10GB free space
  • Models: 7B parameter models (Q4)

Recommended (Good Experience)

  • RAM: 16GB
  • GPU: 8GB VRAM (RTX 3060/4060)
  • Storage: 50GB SSD
  • Models: Up to 13B models

Optimal (Best Performance)

  • RAM: 32GB+
  • GPU: 24GB+ VRAM (RTX 4090 / 5090)
  • Storage: 100GB+ NVMe SSD
  • Models: 33B-70B models

Apple Silicon (Mac)

M1/M2/M3/M4 Macs are excellent for local AI due to unified memory:

  • M1/M2 (8GB) - 7B models work well
  • M1/M2 Pro (16GB) - 13B models comfortable
  • M1/M2 Max (32GB+) - 33B models possible
  • M3/M4 Ultra (64GB+) - 70B models feasible

GPU vs CPU Performance

CPU Only:
• 5-10 tokens/second
• Works on any computer
• Free (no GPU needed)
With GPU:
• 50-100+ tokens/second
• Requires NVIDIA GPU
• Much faster responses
Budget Tip: Here's the thing - we don't need expensive hardware to start. An 8GB RAM laptop can run 7B models surprisingly well. Start small and upgrade if needed.

Recommended Tools

Ollama

Command-line tool for running LLMs locally

Primary

LM Studio

User-friendly GUI for local LLMs

Primary

Jan

Open-source ChatGPT alternative with privacy focus

Alternative

GPT4All

Cross-platform local LLM runner

Alternative

Hugging Face

Model hub with thousands of models

Models

Open WebUI

ChatGPT-like interface for Ollama

Interface

Frequently Asked Questions

In my experience, for most tasks, local models like Llama 3.2 achieve 80-90% of ChatGPT's quality. For specialized tasks like coding (DeepSeek Coder), they can match or exceed cloud AI. The trade-off is worth it for privacy and cost savings.
In my view, Ollama is better for developers who want command-line access and API integration. LM Studio is better for those who want a graphical interface. Both can run the same models - choose based on our workflow preference.
Absolutely! A laptop with 8GB RAM can run 7B parameter models. 16GB RAM handles 13B models well. Apple M1/M2/M3/M4 MacBooks are particularly good for local AI due to unified memory architecture.
No, but it helps significantly. CPU-only runs work but are slow (5-10 tokens/second). A GPU with 8GB+ VRAM provides 10x faster performance. Apple Silicon Macs work great without a dedicated GPU.
Yes. Models like Llama, Mistral, and Gemma are released under permissive licenses for personal and commercial use. Always check the specific license of each model. The models themselves are safe - they're just mathematical weights.
It varies by model size: 7B models (Q4) need ~4GB, 13B models need ~8GB, 33B models need ~20GB, and 70B models need ~40GB. Keep 50-100GB free for a good collection of models.

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