LocalAI vs OpenAI API: Which Should You Choose in 2026?
Choosing between LocalAI and OpenAI API comes down to understanding what each tool does best. This comparison breaks down the key differences so you can make an informed decision based on your specific needs, not marketing claims.
By Toolradar Team · Last updated February 28, 2026 · Methodology
Short on time? Here's the quick answer
We've tested both tools. Here's who should pick what:
LocalAI
Self-hosted OpenAI-compatible API
Best for you if:
- • You need something completely free
- • OpenAI-compatible API you can self-host
- • Runs on CPU - no expensive GPU needed
OpenAI API
API access to GPT, DALL-E, and Whisper
Best for you if:
- • You want the higher-rated option (9.5/10 vs 7.8/10)
- • API access to GPT-4, DALL-E, Whisper, and other frontier AI models
- • Chat completions API with function calling and streaming
| At a Glance |  LocalAI |  OpenAI API |
|---|---|---|
Price | Free | Paid |
Best For | API Tools | API Tools |
Rating | 78/100 | 95/100 |
| Feature | LocalAI | OpenAI API |
|---|---|---|
| Pricing Model | Free | Paid |
| Editorial Score | 78 | 95 |
| Community Rating | No ratings yet | No ratings yet |
| Total Reviews | 0 | 0 |
| Community Upvotes | 0 | 0 |
| Categories | API ToolsHosting & Deployment | API ToolsAI Model Deployment |
How LocalAI and OpenAI API Compare
LocalAI
Self-hosted OpenAI-compatible API
Free · 78/100 score
OpenAI API
API access to GPT, DALL-E, and Whisper
Paid · 95/100 score
Who Should Use What?
On a budget?
LocalAI is free. OpenAI API is paid.
Go with: LocalAI
Want the highest-rated option?
LocalAI: 78/100. OpenAI API: 95/100.
Go with: OpenAI API
Value user reviews?
Neither has user reviews yet.
Go with: OpenAI API
3 Questions to Help You Decide
What's your budget?
LocalAI is free. OpenAI API is paid. Go with LocalAI if free matters most.
What's your use case?
Both are api tools tools. Compare their specific features to decide.
How important are ratings?
OpenAI API scores higher: 95/100 vs 78/100.
Key Takeaways
OpenAI API
- Higher score: 95/100 vs 78
- Our pick for this comparison
LocalAI
- Completely free
The Bottom Line
OpenAI API (95/100) is our pick. That said, LocalAI is free — hard to beat on price.
Frequently Asked Questions
Is LocalAI or OpenAI API better?
OpenAI API scores 95/100 in our evaluation. LocalAI is free and OpenAI API is paid.
What are LocalAI and OpenAI API used for?
LocalAI: Self-hosted OpenAI-compatible API. OpenAI API: API access to GPT, DALL-E, and Whisper.
What does LocalAI cost vs OpenAI API?
LocalAI is completely free. OpenAI API is a paid tool. Visit their websites for detailed pricing.