Insight · Data and AI systems

On-premise, cloud or hybrid AI: how to manage company data

The decision does not start with the model. It starts with the activity, the purpose of each piece of information and the consequences of processing it.

A project can keep company data and complete context on premise, use a cloud service for a bounded operation, or exclude some information from the AI workflow. The route should remain explicit, verifiable and assigned to responsible people.

Editorial noteDraft generated by Codex on 12 August 2026. Not yet reviewed.

From information to an allowed routeThree connected decisions
  1. Information and purposeWhat does the activity need, and why?
  2. Local assessmentSensitivity, access, necessity and effects.
  3. Allowed routeLocal, reduced external, hybrid or human review.
Fill in the mapCompare the routes

First distinction

On-premise versus cloud AI is not the whole decision.

The same activity may need several routes. A contract archive can stay inside the company system; an excerpt without names or confidential terms can be processed by an external model; a decision affecting people or customers can stop in front of a responsible person.

Asking only whether the model is local hides the rest of the processing path: which files are read, what enters prompts, where outputs and logs are stored, which tools can be activated and who may approve the result.

The question that opens the architecture

What is the minimum information required for this result, and which part must remain under local control?

Criteria before tools

Purpose, necessity, sensitivity and consequences.

For personal data, the GDPR establishes purpose limitation, data minimisation, storage limitation, integrity, confidentiality and accountability. Data protection should be integrated into design and default settings, before data is connected to a model.

01

Activity and result

Describe the work and the object the system should prepare. Without that boundary, every field can appear potentially useful.

02

Purpose and necessity

Connect every item to a specific function. If a field does not change the result, do not include it by habit.

03

Sensitivity and obligations

Distinguish personal data, contractual information, trade secrets, credentials, intellectual property and public sources.

04

Access and recipients

Name who can see sources, prompts, outputs and logs, and which providers or subprocessors could receive them.

05

Effects and responsibility

An internal summary, an update to a business system and a decision about a person require different controls.

Processing architecture

Four possible routes for information.

Local

Data and processing stay inside the controlled system.

This suits context that should not leave or tasks a local function can perform. Device security, access, logs and updates still matter.

Approved external

The service receives the minimum required.

The provider, purpose, payload, retention and terms have been assessed for that function.

Hybrid

Complete context remains local.

A local function selects, reduces or pseudonymises input; the external service receives only the planned part and the result returns for verification.

Excluded or human

The data stays outside the AI workflow.

Uncertainty, sensitivity or consequences require another process, a responsible person or specialist assessment.

These routes can coexist in one project. The goal is to make the relation between information, function and destination readable.

Possible function

What a sensitivity router would do.

A sensitivity router is a local function that receives information and activity context, applies categories and rules, and proposes an allowed route. It can remove identifiers, select excerpts, block a request or require review before an external model is connected.

Automated classification is not an authority. A model can miss a secret, confuse a category or lack knowledge of a contractual restriction. Important decisions need deterministic rules, permissions, tests, outcome records and assigned responsibility.

Function status in MAIOS

All-local and local-first hybrid operation belong to the MAIOS architectural direction. This page describes a function to design and test; it does not claim that a verified automatic router is already available.

Practical object

AI Data and Routing Map.

Complete one row for each group of information used by an activity. Missing answers show which decisions must precede integration.

  1. 01

    Activity and result

    What work is performed, and what should the system prepare or change?

  2. 02

    Information and source

    Which data, documents, messages or applications are needed? Who maintains them?

  3. 03

    Purpose and necessity

    Why is each item required? What can be removed without losing the result?

  4. 04

    Classification

    Is it public, internal, confidential, personal, contractual, secret or governed by specific conditions?

  5. 05

    People and access

    Who may read the source, prepare the prompt, see the output and authorise its use?

  6. 06

    Local processing

    Which operations can happen inside the controlled system: search, classification, reduction, pseudonymisation or generation?

  7. 07

    External minimum

    Which excerpt may leave, to which service and for what declared function?

  8. 08

    Retention and logs

    Where do inputs, outputs and traces remain? For how long, with what access and deletion path?

  9. 09

    Verification and action

    Who checks the result, and which effect can occur only after approval?

  10. 10

    Error and recovery

    How is the route stopped, a classification corrected and the event reconstructed?

Map summary

For [activity], we use [information] to produce [result]. [local function] keeps or transforms the context. Only [minimum content] may reach [external service] under [conditions]. [responsible role] verifies before [effect].

Illustrative scenario

Preparing a comparison from contract documents.

A team needs to compare contracts, attachments and internal notes. The local system indexes documents, identifies names, amounts and confidential clauses, and prepares excerpts linked to their sources. An external model receives only approved passages without identifiers that are unnecessary for suggesting a comparison structure.

The draft returns to the company system with source references. A person checks omissions, interpretations and conditions before the content is used. If a document cannot be reduced without losing meaning, it remains in the local route or stays outside AI processing.

This scenario illustrates a possible architecture. It is not a client case or an already available configuration.

Operational security

Controls continue beyond model location.

Devices and storage

Encryption, updates, backups, accounts and separated environments protect local data and models.

Permissions and tools

Reading a file, querying a database, writing to a business system and sending a message are distinct effects.

Prompts, outputs and logs

Governance also covers temporary copies, history, caches, telemetry and observability systems.

Provider and terms

Model, API, region, retention, content use and subprocessors need assessment on the service actually selected.

Quality and attacks

Malicious documents, hidden instructions, incorrect extraction and invented results require filters and verification.

Responsibility and incidents

The organisation needs to know who decides, who can stop the process and how an exposure is reported, reconstructed and corrected.

This map supports architecture work. Legal basis, sector obligations and appropriate safeguards depend on the case and require assessment by the relevant functions in the organisation.

Relation to MAIOS

A hybrid system can preserve context without sending all of it.

MAIOS is pursuing two composable forms: all-local when context, model, tools and work can remain on the user’s system; local-first hybrid when an external function adds capability without automatically receiving complete context or system authority.

The value of a local model is not limited to replacing an external service. It can maintain project continuity, prepare minimum context, apply rules and verify what returns. The external model remains a selected capability for a bounded function.

Public sources

References for further study.

Frequently asked questions

Company data, local models and hybrid systems.

Should company data use on-premise or cloud AI?

It depends on the activity, the data required, the constraints and the capabilities needed. One project can keep confidential context on premise, use a cloud service for a bounded function and stop other data for human review.

Does a local AI model automatically keep data secure?

No. It can reduce some exposures, but device access, permissions, storage, logs, connected tools, updates and resulting actions still need governance.

What does a hybrid AI system mean?

It distributes work between local components and external services. Complete context may stay local while only the minimum content required for a declared function is sent outside.

Can a local model classify sensitive data?

It can assist classification, but it can be wrong. Important categories need rules, permissions, tests and human review proportionate to the consequences.

Does pseudonymisation make personal data anonymous?

No. If information can be linked back to a person using additional data, it remains pseudonymised personal data and still requires the relevant safeguards.

Where should a company start defining data routes?

Start with one activity. Name the result, the information required, who may access it, which transformations can happen locally and what minimum content may leave the controlled system.