What Ollama actually is
Ollama is a free, open-source tool that runs AI models on your own computer. The software downloads, manages, and runs models for you, handling the technical setup so you don't need to. Think of it as the thing that makes a downloaded model actually usable, similar in spirit to how a media player makes a downloaded video file watchable. Ollama itself has no intelligence of its own; the model it's running does that work.
Is Ollama free?
Yes. The core tool is MIT-licensed and free for personal and commercial use, with no subscription and no usage limits on local models. Ollama Inc., the company behind it, raised a $65 million funding round in July 2026 and does sell an optional paid cloud tier for running larger models on hosted GPUs, but that's a separate product from running models locally on your own machine, which stays free.
What it's used for
- Running a chat model locally, the way this site's beginner guide walks through.
- Powering other apps and tools. Ollama runs a local API that other software (coding assistants, browser extensions, custom scripts) can connect to instead of an API service.
- Development and testing without per-token API costs while building something that will eventually use a cloud model.
Ollama vs. a model: a common confusion
People sometimes assume Ollama has its own intelligence, the way ChatGPT or Claude do. It doesn't. Ollama is a runner: you tell it which model to download (Llama, Qwen, DeepSeek, and hundreds of others), and it handles running that model on your hardware. The confusion is understandable, since typing "ollama run llama3.1:8b" makes it look like Ollama itself is generating the response. In reality, the downloaded model does that work; Ollama is the delivery mechanism.