Where does Local AI fit in the 60-30-10 Model?

As I'm going through classes and considering the 60-30-10 rule, I started to wonder when local AI (like Mistral or Deepseek) should be used.

Is local AI part of the probabilistic portion, sematic portion, both, neither?

Where does it fit in the orchestration?

I notice local AI chews up my RAM and I'm wondering how I should use it properly.

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Jake Van Clief, giving you the Cliff notes on the new AI age.

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