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Private AI on Your Own Computer

Module 3 — Private, Safe and Useful

Lesson 7: Local Models with Other Tools: Coding Assistants and Agents

Last updated: 2026-10-09

Local models aren't just for chat. Coding assistants, agents and even Claude Desktop can be pointed at a model on your own machine. That saves money and keeps code private, with the usual agent cautions and some quality trade-offs.

Lesson 7: Local Models with Other Tools: Coding Assistants and Agents

Blackboard

One engine, many tools

12 min
Concept 1

Compatible servers

Ollama and LM Studio run local servers that speak the same 'language' (API) as OpenAI's and Anthropic's services. Many tools let you change the address they talk to. Point them at your own machine and they use your local model instead. Ollama added support for Claude Desktop as a gateway in 2026, and LM Studio has a guide for Claude Code.

Concept 2

Coding with local models

Local models are decent at explaining code, spotting obvious bugs and writing small functions, and they keep proprietary code on your machine. They are weaker on large, multi-file changes than the best cloud models. A common pattern is local for review and routine work, cloud for the hardest problems.

Concept 3

Agents on your own hardware

Open-source agents such as Hermes Agent can run with a local model, so tasks don't run up a per-token bill. Agent work is demanding: it uses long contexts and many steps, so it needs a capable model and plenty of memory. The safety rules are the same as for any agent: limited access, approval before sending or deleting, and an easy off switch.

Concept 4

The real costs

Local isn't free: there's the hardware, electricity for long runs, your set-up time, and slower results. For occasional use, a cloud subscription can be cheaper. For heavy private use, or when data can't leave the building, local wins. Our Hermes Agent cost guide compares local and cloud running costs with real numbers.

Pause and Think

Which AI tool do you already use that you'd like to run more privately or more cheaply?

Flashcards

Key Terms

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Additional Resources
Practice Question

You want a coding assistant to review private company code without sending it to the cloud. What's the usual approach?

Does not count for certificate
Choose one answer, use the hint if needed, then check your answer.
Use the hint before checking if you need a nudge.