Private AI vs Cloud AI

Private AI vs Cloud AI: What's the Difference?

Cloud AI rents you intelligence on someone else's servers, billed per seat or per token. Private AI runs on hardware you own, on your own network. Here's how the two models compare — in plain English.

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	TechFides	Cloud AI
Where data is processed	On hardware in your building, on your own network	On the vendor's servers, over the internet
Pricing model	One-time setup + flat monthly — predictable	Per-seat or per-token — scales with usage and headcount
Cost as you grow	Flat — add users and usage at no extra charge	Rises with every seat and every query
Ownership	You own the hardware and the deployment	You rent access; you own nothing
Data exposure	Nothing leaves your network	Every prompt is sent to a third party
Resilience	Works on your network, internet or not	Depends on the vendor's uptime and your connection
Vendor lock-in	Model-agnostic; swap models without re-platforming	Tied to the vendor's models, terms, and price changes
Best for	Regulated, confidential, or cost-sensitive-at-scale work	General-purpose tasks with non-sensitive data

When cloud AI is the right call

Cloud AI is fast to start, requires no infrastructure, and is inexpensive for small teams and general-purpose tasks. If your data isn't sensitive and your usage is light, renting from a cloud vendor is a perfectly good choice — and we'll tell you so.

The bottom line

It comes down to renting versus owning. Cloud AI is convenient and cheap to start, but your data leaves the building and the bill grows with you. Private AI keeps your data on your network, holds your cost flat, and leaves you owning the hardware. For regulated, confidential, or scale-sensitive work, ownership wins.

Common questions

What exactly is private AI?: Private AI is artificial intelligence that runs on hardware you control — typically on-site in your office — instead of on a cloud vendor's servers. Your documents and prompts are processed locally and never transmitted to a third party. TechFides installs and manages this for you: hardware, models, configuration, and support.
Is cloud AI ever the better choice?: Often, yes. For general-purpose tasks with non-sensitive data, and for very small teams, cloud AI is cheap, instant, and requires no infrastructure. Private AI makes sense when your data is regulated or confidential, when per-seat cloud costs climb as you grow, or when you simply want to own your tools rather than rent them.
Is private AI as good as the big cloud models?: For most business workflows, open models like Llama 3 and Mistral — fine-tuned on your data — are highly capable. For tasks that genuinely need a frontier model, a private deployment can route to a hosted model as a fallback. Capability is rarely the deciding factor; data control and cost structure usually are.
How much does private AI cost?: TechFides prices private AI as a one-time setup fee plus a flat monthly — Sovereign S ($5,000 + $500/mo), M ($10,000 + $1,000/mo), and L ($15,000+ + $2,500/mo). No usage meters, no per-seat fees, and you own the hardware. See the pricing page for the full breakdown and a savings calculator.

See if owning your AI makes sense for you

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TechFides

Cloud AI

Where data is processed

On hardware in your building, on your own network

On the vendor's servers, over the internet

Pricing model

One-time setup + flat monthly — predictable

Per-seat or per-token — scales with usage and headcount

Cost as you grow

Flat — add users and usage at no extra charge

Rises with every seat and every query

Ownership

You own the hardware and the deployment

You rent access; you own nothing

Data exposure

Nothing leaves your network

Every prompt is sent to a third party

Resilience

Works on your network, internet or not

Depends on the vendor's uptime and your connection

Vendor lock-in

Model-agnostic; swap models without re-platforming

Tied to the vendor's models, terms, and price changes

Best for

Regulated, confidential, or cost-sensitive-at-scale work

General-purpose tasks with non-sensitive data

The bottom line

Common questions

What exactly is private AI?

Private AI is artificial intelligence that runs on hardware you control — typically on-site in your office — instead of on a cloud vendor's servers. Your documents and prompts are processed locally and never transmitted to a third party. TechFides installs and manages this for you: hardware, models, configuration, and support.

Is cloud AI ever the better choice?

Often, yes. For general-purpose tasks with non-sensitive data, and for very small teams, cloud AI is cheap, instant, and requires no infrastructure. Private AI makes sense when your data is regulated or confidential, when per-seat cloud costs climb as you grow, or when you simply want to own your tools rather than rent them.

Is private AI as good as the big cloud models?

For most business workflows, open models like Llama 3 and Mistral — fine-tuned on your data — are highly capable. For tasks that genuinely need a frontier model, a private deployment can route to a hosted model as a fallback. Capability is rarely the deciding factor; data control and cost structure usually are.

How much does private AI cost?

TechFides prices private AI as a one-time setup fee plus a flat monthly — Sovereign S ($5,000 + $500/mo), M ($10,000 + $1,000/mo), and L ($15,000+ + $2,500/mo). No usage meters, no per-seat fees, and you own the hardware. See the pricing page for the full breakdown and a savings calculator.