Self-hosted LLMs on premises: architecture, runtimes and sizing (2026) · FusioNative
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How do you run LLMs on premises?

Running large language models on your own hardware: reference architecture, choosing between vLLM, SGLang, NVIDIA NIM and Ollama, sizing GPUs, and serving many teams.

Last updated · Fusionative

Short answer

To run LLMs on premises, you place open-weight models on your own GPU servers, serve them through an inference runtime such as vLLM, SGLang, NVIDIA NIM or Ollama behind an OpenAI-compatible API, and add a platform layer for access control, quotas, monitoring and cost tracking so many teams can share the capacity.

Reference architecture

  • GPU servers sized to the models: model weights plus KV cache must fit in GPU memory.
  • Kubernetes to schedule inference servers and scale replicas.
  • An inference runtime exposing an OpenAI-compatible API.
  • A gateway for authentication, rate limits, quotas and routing between models.
  • A model catalog with approved models and versions.
  • Observability for latency, throughput, errors and GPU utilization, plus usage metering per team.

Choosing an inference runtime

vLLM and SGLang are high-throughput open-source servers for production. NVIDIA NIM packages optimized models as supported containers for NVIDIA GPUs. Ollama is simple to run and well suited to development and smaller deployments. Many platforms offer more than one.

Sizing rules of thumb

A model's weights need roughly its parameter count times bytes per parameter: about 2 bytes per parameter at 16-bit precision, less with 8-bit or 4-bit quantization. Leave headroom for the KV cache, which grows with context length and concurrent users. Larger models are split across several GPUs in one server.

Where FusioNative fits

FusioNative's AI Factory serves models with Ollama, vLLM, SGLang and NVIDIA NIM inside your boundary, with approval queues, tenancy, quotas, metering and GPU fleet observability, on NVIDIA and AMD accelerators.

Inference runtimes at a glance
RuntimeStrengthTypical use
vLLMHigh throughput, broad model support, open sourceProduction serving
SGLangFast serving and structured generation, open sourceProduction and agent workloads
NVIDIA NIMOptimized, supported containers for NVIDIA GPUsEnterprise production on NVIDIA
OllamaSimple setup and model managementDevelopment, small deployments

FAQ

Frequently asked questions

Is self-hosting an LLM cheaper than using an API?

It can be at steady, high utilization, and it keeps data in-house. At low or bursty usage, APIs are often cheaper. Utilization is the deciding factor.

What GPU do I need to run a 70B-parameter model?

At 16-bit precision the weights alone need about 140 GB, so several data-center GPUs; with 4-bit quantization it can fit on fewer. Add memory for the KV cache.

Can on-premises LLMs work without internet access?

Yes. Once model files and container images are inside, open-weight models serve fully offline. See air-gapped AI.