Lesson 4.5 — Private Work: Keeping Sensitive Data Local

Introduction to AI · Module 4: Local LLMs · About 60 min · Windows PC, PowerShell 5, Ollama 0.40.11

Goal: know which jobs should stay on your PC, prove that Ollama only listens to your own PC, and do one real sensitive task fully offline.

Before you start

• cd C:\llm-test
• Pick one real sensitive task: e.g. summarise a medical letter, a bank statement or a tax doc, saved as private.txt (or just copy its text in)

Step 1 · Local vs cloud: what's the difference? (⏱ 0:00–0:10)

Read and tick:

• Cloud chat apps (ChatGPT, Claude, Gemini, Grok) send your text to their servers. Depending on your settings it may be stored, reviewed, or used for training.
• A local model runs on your GPU. The text never leaves the PC unless an app sends it somewhere.
• Local isn't automatically safe: files on disk, PowerShell history and backups still exist.

Step 2 · Prove Ollama only listens locally (⏱ 0:10–0:20)

netstat -ano | findstr 11434

You should see 127.0.0.1:11434 ... LISTENING. That means only this PC can talk to it.

If you see 0.0.0.0:11434, other devices on your network can use it. Check:

[Environment]::GetEnvironmentVariable("OLLAMA_HOST", "User")
[Environment]::GetEnvironmentVariable("OLLAMA_HOST", "Machine")

You should see both lines blank. If either shows 0.0.0.0, remove it (Start → "Edit environment variables for your account"), then quit Ollama from the system tray and start it again.

• Listening on 127.0.0.1 only

Step 3 · Go offline and run the sensitive task (⏱ 0:20–0:35)

1. Turn on Airplane mode (or turn off Wi-Fi and unplug Ethernet).
2. Confirm:

Test-Connection 8.8.8.8 -Count 1 -Quiet

You should see False.

1. Run the task:

$p = "Summarise this in plain English and list anything I need to act on: " + (Get-Content private.txt -Raw -Encoding UTF8)
ollama run qwen3.8:27b $p

You should see the summary in the window. It isn't saved to a file this time, on purpose.

• Sensitive task done offline

Step 4 · Clean up the traces (⏱ 0:35–0:40)

Remove-Item private.txt
Clear-History

Your model chat history lives in $HOME\.ollama\history (from ollama run chats). To clear it:

Remove-Item $HOME\.ollama\history -ErrorAction SilentlyContinue

Turn the network back on.

• Traces cleaned

Step 5 · Write your "Local only" rules (⏱ 0:40–0:55)

notepad C:\llm-test\local-only-rules.txt

Starter list (edit to suit):

RED - local model only: health records, tax file number, bank/crypto statements,
      passwords/API keys (never paste anywhere), IDs/passports, other people's private info
AMBER - paid cloud account with training OFF: work drafts, strata documents
GREEN - any assistant: public info, general questions, coding without secrets
Before pasting into a cloud AI: remove names, account numbers, addresses.

Send it to Skills Coach to save in pa-docs.

• Rules written and sent

✅ Pass check

• netstat shows Ollama on 127.0.0.1 only
• One real sensitive task done with the network off
• Local-only rules saved
• Told Skills Coach so 4.5 gets marked done

Troubleshooting