Table 2. When to prefer locally hosted versus cloud-based large language model deployment in dermatology.

Scenarios	Prefer locally hosted	Consider cloud-based (with BAAa)
Routine documentation and encounter summarization	Yes; sensitive content remains on premises [6]	Acceptable if BAA is in place and audited [6]
Stigmatized conditions (eg, sexual health and psychodermatology)	Strongly preferred [8]	Avoid unless clearly justified
Frontier diagnostic reasoning queries	Possible with ≥32 billion parameters and MoEb if hardware permits	Often preferable; cloud frontier models still lead
Burst capacity (mass triage and public health surge)	Limited by fixed local hardware	Cloud elasticity advantageous
Practice without on-site IT support	Risk of unmaintained models and drift	Vendor-managed cloud may be more reliable
Cross-border (GDPRc and European Union AI Act) workflows	Helps with data localization obligations [34]	Requires careful data processing agreements [34]

^aBAA: Business Associate Agreement.

^bMoE: mixture-of-experts.

^cGDPR: General Data Protection Regulation.