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Guidance›Digital & AI›Local LLMs, data centres and sovereign AI explained
Digital & AI

Local LLMs, data centres and sovereign AI explained

Local LLMs, data centres and sovereign AI explained without jargon. For business owners starting to think about where their data lives, who controls it, and what that means over the next decade.

By Samantha Hurley1 minute readUpdated August 2026

Most of the AI tools you use today are owned by large overseas companies, running on their infrastructure and storing your data on their terms. That is cloud AI, and it is starting to change. In this video, 25eight CEO Sam Hurley unpacks three concepts that will shape how businesses and communities engage with AI over the next decade: local LLMs, data centres and sovereign AI. None of it requires a technical background, and all of it bears on a question every owner now faces: where does your data live, and who controls it?

Local LLMs are smaller models that run on hardware you control, keeping your data inside the business, with benefits in privacy, speed and cost and trade-offs in raw capability. Data centres are the physical infrastructure underneath almost everything digital you do, and where they sit shapes which laws apply to your data. Sovereign AI is the push to build AI capability and infrastructure within Australia, at business, regional and national levels. The video covers what Australian businesses and governments are already doing, and why decentralised AI could be a significant opportunity for small businesses and regional communities.

Key points

  • Cloud AI means your prompts and data leave your business on the provider's terms.
  • Local LLMs trade some capability for privacy, speed and control.
  • Data centre location shapes which laws govern your data.
  • Sovereign AI is about Australian control of AI capability and infrastructure.
  • Where your data lives is now a business decision, whether or not you are technical.

For a practical guide to running AI on your own terms, read Local AI for small business.

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