Comparison
Cloud AI vs. On-Premise AI
Which AI solution fits your business? An honest comparison — without the jargon.
Side-by-Side Comparison
Cloud-KI
On-Premise
Where is your data stored?
On the provider's servers (often US)
On your own servers
Who can see your data?
The provider has access
Only you and your team
GDPR requirements
Complex — data processing agreements needed, cross-border transfers
Simpler — data stays in your organization
Cost model
Per-use / monthly subscription
One-time license + own hardware
Customization
Limited — you use what the provider offers
Full — your own models, your own rules
EU AI Act readiness
Dependent on provider
Full control over logs and documentation
Internet outage
AI stops working
AI keeps running
When cloud AI makes sense
- You only work with non-sensitive, public data
- You only need AI occasionally for simple tasks
- You want to start immediately without own IT infrastructure
- Your industry has no special data privacy requirements
When on-premise AI is the better choice
- You work with contracts, financial data, or personnel files
- Your industry is subject to GDPR, BaFin, MaRisk, or similar regulations
- You want to customize the AI to your own documents and processes
- Multiple employees use AI regularly (predictable costs)
- You don't want to depend on a US provider's pricing changes
- The EU AI Act requires demonstrable control over your AI systems
Cost Comparison: A Calculation Example
For a company with 20 employees using AI daily:
Cloud-KI
On-Premise
Month 1
~€400 (subscriptions + usage)
~€3,000 (license + hardware)
Month 6
~€2,400
~€3,000 (no additional costs)
Month 12
~€4,800
~€3,000
Month 24
~€9,600
~€3,000
From month 8 onward, on-premise is cheaper. The more employees, the faster it pays off.
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