Cloud, Local, or Self-Hosted: Three Ways AI Models Receive and Process Your Messages
When a user sends a message to an AI chatbot like ChatGPT or Gemini, the text travels over the internet to a remote server where a large language model processes it and returns a response. Developers building AI applications replicate this same request-response pattern in code rather than through a chat interface. AI models can be deployed in three ways: cloud-hosted services such as Gemini, GPT, and Claude, which charge per token and require an API key; locally on a personal machine using tools like Ollama, which is free but limited by hardware; or on privately controlled servers for organizations with strict data privacy needs. Cloud models offer superior performance and are always up to date, while local models trade capability for cost savings, privacy, and offline access. An API key acts as an authentication credential, included with every cloud request to verify the user's identity and authorize model usage.
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