What private AI is
It is an artificial intelligence system in which the company controls where its data is processed. It can run an open model installed on the company’s own servers or on a private cloud the company contracts, or it can use an external commercial model only after an intermediate layer removes or replaces sensitive information. What defines it is not a model brand but who controls the data, the permissions and the record of what was done.
When it makes sense
- When working with health data, legal files, financial information or personal data that should not leave the organization.
- When a contract, a client or a regulation requires knowing where information is processed.
- When usage volume is high and a more predictable cost than paying per request is preferable.
- When the company does not want to depend on a single provider for a critical capability.
The options, from most closed to most open
- Model on your own servers: data never leaves the company’s infrastructure. It requires hardware with adequate compute and maintenance.
- Private cloud: the model runs on resources contracted and isolated for the company, with control over region and access.
- External model with a data boundary: before each request, sensitive data is detected and replaced, and the answer is rebuilt inside. Varexis plays that role.
- Hybrid architecture: sensitive work runs on a private model and the rest can use more powerful external models.
What to know before deciding
The best commercial models usually perform better on complex reasoning than the open models a company can host. For many business tasks, such as classifying, extracting data, summarizing or answering from internal documents, a well-integrated open model is enough. A private LLM also carries hardware and maintenance costs that must be compared with pay-per-use pricing. The assessment compares the options using the company’s real cases before choosing.
What the system includes
- Installation and configuration of the model or the data boundary.
- Connection to internal documents and systems, with permissions by user and role.
- A log of requests and actions for audit.
- Quality testing with company cases and a model update plan.
Data protection rules
The design follows the operation’s actual jurisdiction: the EU GDPR, UK GDPR, HIPAA for US healthcare, Argentina’s Ley 25.326 or Brazil’s LGPD, among others. Private AI does not replace legal advice, but it provides the technical controls that advice usually requires: minimization, restricted access, defined retention and evidence. More in privacy and regulation.
Provider independence
The system is designed so the model, cloud or provider can be changed without rebuilding integrations or losing accumulated knowledge. It is the same principle we describe in technological sovereignty.