Introduction
You are paying a monthly fee for an AI tool that lives on someone else's computer. Every question you type travels across the internet, gets answered, and leaves a copy sitting on their servers. And the moment your connection drops, it stops working.
Well, you can enjoy the benefits of AI without these issues. There is another way: you can run your own AI on a single computer in your home or office. No monthly fee, your messages stay on your system, and it keeps working even when the internet is down. By the end of this guide, you will have your own AI chatbot running on your network (usable from any normal web browser)
What does running an LLM locally means?
Many popular AI chat tools like ChatGPT and Claude run on computers somewhere far away. You type a question, it travels across the internet, an answer comes back, and a copy of what you wrote sits on their servers. This works well, but has trade-offs.
- You usually pay a monthly fee.
- Your messages pass through someone else's servers.
- The tool stops responding if the connection drops.
- Random outages can disrupt your work.
- Privacy is disturbed.
On the other hand, a local LLM runs on a computer you own.
For a home chat, keeping things private is a convenience. For a business, that's the whole point. For a company, customer records and internal documents moving through an outside server is a real liability, and the usual answer is a private model trained on your own data, the territory of generative AI solutions.

The Three Tools You Will Use
Three names show up in this guide. You only need to know what each one is for.
Docker is the container. It runs everything else in one tidy package and isolates chatbot from the rest of your computer. You only need to install Docker. Once it's running, Docker automatically downloads, installs, and sets up Ollama and Open WebUI for you.

Ollama is the engine. It runs the AI and does the thinking. On its own it has no screen and no buttons, like a car engine sitting on a workbench.

Open WebUI is the dashboard. It gives you a chat page with a login, a model picker, and a message box, and it talks to Ollama in the background.

Put together: Docker holds everything, Ollama does the work, and Open WebUI is the screen you actually use.
What You Need Before Starting
Note: This guide uses a small AI model that runs on the CPU. Larger models typically require a dedicated GPU for good performance.
- A computer to act as the host and stay powered on while people use the AI.
- At least 16 GB of RAM recommended.
- Docker Desktop (installed in the next step).
- The same network. Any devices that will use the AI must be connected to the same Wi-Fi or wired network as the host computer.
A GPU is helpful but not required for this guide.
How to Install a Local LLM on Windows
Installing a local LLM on Windows only takes a few steps. You'll install Docker, create a small setup file, start the AI, and then open it in your web browser. Just follow each step in order, and you'll have your own private chatbot running on your computer.
Step 1: Install Docker
Go to the official Docker website, download Docker Desktop for your system (Windows, Mac, or Linux), and install it the same way you would install any normal app.

When the installation finishes, open Docker once and leave it running in the background. A small whale icon will appear near the clock or menu bar, indicating that Docker is ready to use.

Step 2: Create the Setup File
One small file tells Docker exactly what to run. You create it with a couple of commands, so there is no text editor to open and no file to rename.
Open PowerShell. First, create a folder for the project and move into it:
cd ~\Desktop
mkdir Local-AI -Force
cd Local-AIThat makes a folder called Local-AI in your home folder. Everything from this point onward will happen within this folder.
Now create the setup file. Copy the whole block below, paste it into PowerShell, and press Enter.
@'
services:
ollama:
image: ollama/ollama:latest
container_name: ollama
ports:
- "11435:11434"
environment:
- OLLAMA_NUM_PARALLEL=1
- OLLAMA_MAX_LOADED_MODELS=1
- OLLAMA_KEEP_ALIVE=24h
- OLLAMA_FLASH_ATTENTION=1
volumes:
- ./ollama_data:/root/.ollama
entrypoint:
- /bin/sh
- -c
- |
ollama serve &
pid=$$!
echo "Waiting for Ollama server to start..."
while ! ollama list >/dev/null 2>&1; do
sleep 1
done
echo "Ollama server is up. Checking for qwen3.5:0.8b..."
if ! ollama show qwen3.5:0.8b >/dev/null 2>&1; then
echo "Model qwen3.5:0.8b not found. Pulling..."
ollama pull qwen3.5:0.8b
else
echo "Model qwen3.5:0.8b already exists."
fi
if ! ollama show qwen3.5-fast:latest >/dev/null 2>&1; then
echo "Creating qwen3.5-fast (thinking disabled)..."
printf 'FROM qwen3.5:0.8b\nSYSTEM "/no_think"\n' > /tmp/Modelfile
ollama create qwen3.5-fast -f /tmp/Modelfile
fi
echo "Setup complete. Keeping Ollama server running..."
wait $$pid
restart: unless-stopped
open-webui:
image: ghcr.io/open-webui/open-webui:main
container_name: open-webui
ports:
- "3000:8080"
environment:
- OLLAMA_BASE_URL=http://ollama:11434
volumes:
- open-webui-data:/app/backend/data
depends_on:
- ollama
restart: unless-stopped
volumes:
open-webui-data:
'@ | Set-Content docker-compose.yml
Keep this PowerShell window open. You are already in the correct folder for the next step.
In plain terms, this file tells Docker to:
- Run the AI engine (Ollama) and the chat screen (Open WebUI) together as a pair.
- On the first start, it downloads a small AI model called qwen3.5:0.8b, which is about 1 GB.
- Build a second "fast" version of that model that skips the slow thinking-out-loud step, so replies come back quicker.
- Save everything to folders on your disk, so nothing is lost when the computer is switched off.
Step 3: Start the chatbot
Now you start everything with a single command. Open a command window inside the folder you made. On Windows that's PowerShell, on a Mac it's Terminal. Type this and press Enter:
docker compose up -d
The -d part means "run it quietly in the background." The first run downloads the AI model, so give it a few minutes. After that, Docker uses the model you already downloaded.

Want to watch the progress while it works? Run this to see what it is doing:
docker compose logs -f
When you see a line saying the setup is complete, the hard part is over. Press Ctrl + C to close the log view. This only closes the log view. The AI keeps running.
If you ever want to confirm the model downloaded correctly, run:
docker exec -it ollama ollama list
You should see qwen3.5:0.8b in the list, around 1 GB in size. If it is there, you are ready to chat.

Step 4: Open the Chat Page
On the host computer, open your web browser and go to this address:
The first time, it asks you to register. The very first account you create automatically becomes the admin, which is the owner account. This sign-up happens on your own computer, so use any email and password you like, and write them down somewhere safe.
Pick qwen3.5:0.8b, or the quicker qwen3.5-fast version, type a message, and you are chatting with your own private AI.

How to Use Chatbot From Other Devices?
Once the host computer is running, any phone, tablet, or laptop on the same network can open the chat page. All you need is the host computer's local IP address, which identifies that machine on your network.
First, find that address on the host computer. Open the command window and run:
ipconfig
On a Mac or Linux machine, use ifconfig or ip addr instead. Look for your active connection, usually labelled Wi-Fi or Ethernet, and find the line marked IPv4 Address. It normally looks something like 192.168.1.15 or 10.0.0.8.

Now pick up another device on the same Wi-Fi, open its browser, and type that address followed by :3000. For example:
Swap in your own numbers, and that is it. 
Everyday Commands you’ll need
You only need a handful of commands to run this day to day.
Start the chatbot:
docker compose up -d
Stop the chatbot, without deleting anything:
docker compose down
See how much memory and processor it is using:
docker stats
Press Ctrl + C to leave that view.
Download or refresh the model by hand, if you ever need to:
docker exec -it ollama ollama pull qwen3.5:0.8b
Your accounts and your downloaded model survive a down and a later restart, because they are saved on your disk. Stopping the AI is like switching off a television. Everything is still there when you turn it back on.
Incase something goes wrong:

A Few Honest Trade-Offs
This is a real, working setup, but it is not free of cost or limits, and it helps to know them before you start so nothing surprises you later. Each one is manageable for home or office use. Knowing them upfront sets the right expectations.
- The small model handles quick questions, drafting, summarising, and learning well, but it is not as sharp as the large paid services for heavy or technical work.
- You need a host computer with at least 16 GB of RAM, plus a dedicated GPU if you later want bigger models to run smoothly.
- The host has to stay powered on whenever anyone uses the AI, so it adds to your electricity bill.
- Replies are only as fast as the host's memory and processor, and an underpowered machine will feel slow.
- Everyone shares the same engine and takes turns for the actual processing, so several people at once can mean a short wait.
You can swap in a bigger, smarter model later without changing anything else and If you have reached the point where you want this running as a real tool for your team, it might need some extra work which falls under AI app development.
You Are Done
What you just built is the home version. For a household or a small office, it is all you need. The business version is a different job. A private LLM running on your own company data, behind your own login, with nothing leaving your network. This brings up questions a setup guide cannot answer. Which model fits your data, how much hardware it needs, and who gets access once a whole team is using it.
The answer to these depend on what your data looks like and how your team works.If you want to discuss your use case and shape out the exact specifics, our AI experts are your ideal partners.
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