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What is private AI?
Private AI means running an AI model on infrastructure that you or your vendor controls, so prompts, documents and answers never go to an outside AI provider. Companies use it for work that shouldn't leave their hands: HR cases, legal drafts and numbers that aren't public yet.
By Archit Khandelwal, Founder of Klaie · Updated 1 November 2026
The notes support two of the three complaints. I've drafted next steps for the panel, with the interview dates and the policy each finding relates to.
What makes AI private.
Where the model runs
The model sits on infrastructure you or your vendor controls, not on an outside AI provider's service.
No fallback
If the private model is down, the request stops. It doesn't move to a public model to get an answer.
Tools stay inside
Anything that could carry your words elsewhere, like web research or image generation, is switched off.
A clear boundary
People can see when a conversation is private, and it stays private from start to finish.
The options, from most open to most private
Companies usually weigh four ways of using AI:
- Consumer chatbots: anyone can sign up, on the provider's consumer terms
- Business AI plans: a third-party provider runs the model under contract terms
- Vendor-run private models: a software vendor runs the model on infrastructure it controls
- Your own server: the model runs on your machines, inside your network
When a company needs private AI
A useful test: would you paste this into a public chatbot? If not, it belongs on a private model. Typical examples:
- HR investigations, performance cases and grievance notes
- Draft contracts, legal correspondence and privileged material
- Board papers, unreleased financials and deal documents
- Customer or partner information covered by an NDA
What to check before you trust the word “private”
The word is used loosely, so ask three direct questions.
- What happens when the private model is unavailable? The right answer is that it stops.
- Which tools still work, and can any of them carry your words outside?
- Is your content used for training? It shouldn't be, without your written agreement.
How Klaie does it
Klaie's Sensitive mode is a tier in the same workspace. Choose it when you start a conversation and Klaie answers on a private model it runs itself, with no fallback and with outside tools switched off. It can still search the company files you can open and make documents, decks and spreadsheets.
Questions people ask
What is private AI?
Running an AI model on infrastructure that you or your vendor controls, so prompts, documents and answers never go to an outside AI provider.
Is a business plan from an AI provider private AI?
Not in this sense. The provider still processes your prompts, under its contract terms. Private AI keeps that work on infrastructure you or your vendor controls.
Do you have to choose between private AI and the best models?
No. Private models suit focused work like summarizing, drafting and reviewing, and frontier models suit everything else. Klaie keeps both in one workspace, so each conversation uses the right one.
Can private AI run on our own server?
Yes. On Klaie's Enterprise plan, Sensitive can run on a private server of your own, on Klaie's server or yours.
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