This article details how to build a 100% local MCP (Model Context Protocol) client using LlamaIndex, Ollama, and LightningAI. It provides a code walkthrough and explanation of the process, including setting up an SQLite MCP server and a locally served LLM.
A tutorial on building a private, offline Retrieval Augmented Generation (RAG) system using Ollama for embeddings and language generation, and FAISS for vector storage, ensuring data privacy and control.
1. **Document Loader:** Extracts text from various file formats (PDF, Markdown, HTML) while preserving metadata like source and page numbers for accurate citations.
2. **Text Chunker:** Splits documents into smaller text segments (chunks) to manage token limits and improve retrieval accuracy. It uses overlapping and sentence boundary detection to maintain context.
3. **Embedder:** Converts text chunks into numerical vectors (embeddings) using the `nomic-embed-text` model via Ollama, which runs locally without internet access.
4. **Vector Database:** Stores the embeddings using FAISS (Facebook AI Similarity Search) for fast similarity search. It uses cosine similarity for accurate retrieval and saves the database to disk for quick loading in future sessions.
5. **Large Language Model (LLM):** Generates answers using the `llama3.2` model via Ollama, also running locally. It takes the retrieved context and the user's question to produce a response with citations.
6. **RAG System Orchestrator:** Coordinates the entire workflow, managing the ingestion of documents (loading, chunking, embedding, storing) and the querying process (retrieving relevant chunks, generating answers).
1. **Document Loader:** Extracts text from various file formats (PDF, Markdown, HTML) while preserving metadata like source and page numbers for accurate citations.
2. **Text Chunker:** Splits documents into smaller text segments (chunks) to manage token limits and improve retrieval accuracy. It uses overlapping and sentence boundary detection to maintain context.
3. **Embedder:** Converts text chunks into numerical vectors (embeddings) using the `nomic-embed-text` model via Ollama, which runs locally without internet access.
4. **Vector Database:** Stores the embeddings using FAISS (Facebook AI Similarity Search) for fast similarity search. It uses cosine similarity for accurate retrieval and saves the database to disk for quick loading in future sessions.
5. **Large Language Model (LLM):** Generates answers using the `llama3.2` model via Ollama, also running locally. It takes the retrieved context and the user's question to produce a response with citations.
6. **RAG System Orchestrator:** Coordinates the entire workflow, managing the ingestion of documents (loading, chunking, embedding, storing) and the querying process (retrieving relevant chunks, generating answers).
A Reddit thread discussing preferred local Large Language Model (LLM) setups for tasks like summarizing text, coding, and general use. Users share their model choices (Gemma, Qwen, Phi, etc.) and frameworks (llama.cpp, Ollama, EXUI) along with potential issues and configurations.
| **Model** | **Use Cases** | **Size (Parameters)** | **Approx. VRAM (Q4 Quantization)** | **Approx. RAM (Q4)** | **Notes/Requirements** |
|----------------|---------------------------------------------------|------------------------|-----------------------------------|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Gemma 3 (Meta)** | Summarization, conversational tasks, image recognition, translation, simple writing | 3B, 4B, 7B, 8B, 12B, 27B+ | 2-4GB (3B), 4-6GB (7B), 8-12GB (12B) | 4-8GB (3B), 8-12GB (7B), 16-24GB (12B) | Excellent performance for its size. Recent versions have had memory leak issues (see Reddit post – use Ollama 0.6.6 or later, but even that may not be fully fixed). QAT versions are highly recommended. |
| **Qwen 2.5 (Alibaba)** | Summarization, coding, reasoning, decision-making, technical material processing | 3.5B, 7B, 72B | 2-3GB (3.5B), 4-6GB (7B), 26-30GB (72B) | 4-6GB (3.5B), 8-12GB (7B), 50-60GB (72B) | Qwen models are known for strong performance. Coder versions specifically tuned for code generation. |
| **Qwen3 (Alibaba - upcoming)**| General purpose, likely similar to Qwen 2.5 with improvements | 70B | Estimated 25-30GB (Q4) | 50-60GB | Expected to be a strong competitor. |
| **Llama 3 (Meta)**| General purpose, conversation, writing, coding, reasoning | 8B, 13B, 70B+ | 4-6GB (8B), 7-9GB (13B), 25-30GB (70B) | 8-12GB (8B), 14-18GB (13B), 50-60GB (70B) | Current state-of-the-art open-source model. Excellent balance of performance and size. |
| **YiXin (01.AI)** | Reasoning, brainstorming | 72B | ~26-30GB (Q4) | ~50-60GB | A powerful model focused on reasoning and understanding. Similar VRAM requirements to Qwen 72B. |
| **Phi-4 (Microsoft)** | General purpose, writing, coding | 14B | ~7-9GB (Q4) | 14-18GB | Smaller model, good for resource-constrained environments, but may not match larger models in complexity. |
| **Ling-Lite** | RAG (Retrieval-Augmented Generation), fast processing, text extraction | Variable | Varies with size | Varies with size | MoE (Mixture of Experts) model known for speed. Good for RAG applications where quick responses are important. |
**Key Considerations:**
* **Quantization:** The VRAM and RAM estimates above are based on 4-bit quantization (Q4). Lower quantization (e.g., Q2) will reduce memory usage further, but *may* impact quality. Higher quantization (e.g., Q8, FP16) will increase quality but require significantly more memory.
* **Frameworks:** Popular frameworks for running these models locally include:
* **llama.cpp:** Highly optimized for CPU and GPU, especially on Apple Silicon.
* **Ollama:** Simplified setup and management of LLMs. (Be aware of the Gemma 3 memory leak issue!)
* **Text Generation WebUI (oobabooga):** Web-based interface with many features and customization options.
* **Hardware:** A dedicated GPU with sufficient VRAM is highly recommended for decent performance. CPU-only inference is possible but can be slow. More RAM is generally better, even if the model fits in VRAM.
* **Context Length:** The "40k" context mentioned in the Reddit post refers to the maximum number of tokens (words or sub-words) the model can process at once. Longer context lengths require more memory.
| **Model** | **Use Cases** | **Size (Parameters)** | **Approx. VRAM (Q4 Quantization)** | **Approx. RAM (Q4)** | **Notes/Requirements** |
|----------------|---------------------------------------------------|------------------------|-----------------------------------|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Gemma 3 (Meta)** | Summarization, conversational tasks, image recognition, translation, simple writing | 3B, 4B, 7B, 8B, 12B, 27B+ | 2-4GB (3B), 4-6GB (7B), 8-12GB (12B) | 4-8GB (3B), 8-12GB (7B), 16-24GB (12B) | Excellent performance for its size. Recent versions have had memory leak issues (see Reddit post – use Ollama 0.6.6 or later, but even that may not be fully fixed). QAT versions are highly recommended. |
| **Qwen 2.5 (Alibaba)** | Summarization, coding, reasoning, decision-making, technical material processing | 3.5B, 7B, 72B | 2-3GB (3.5B), 4-6GB (7B), 26-30GB (72B) | 4-6GB (3.5B), 8-12GB (7B), 50-60GB (72B) | Qwen models are known for strong performance. Coder versions specifically tuned for code generation. |
| **Qwen3 (Alibaba - upcoming)**| General purpose, likely similar to Qwen 2.5 with improvements | 70B | Estimated 25-30GB (Q4) | 50-60GB | Expected to be a strong competitor. |
| **Llama 3 (Meta)**| General purpose, conversation, writing, coding, reasoning | 8B, 13B, 70B+ | 4-6GB (8B), 7-9GB (13B), 25-30GB (70B) | 8-12GB (8B), 14-18GB (13B), 50-60GB (70B) | Current state-of-the-art open-source model. Excellent balance of performance and size. |
| **YiXin (01.AI)** | Reasoning, brainstorming | 72B | ~26-30GB (Q4) | ~50-60GB | A powerful model focused on reasoning and understanding. Similar VRAM requirements to Qwen 72B. |
| **Phi-4 (Microsoft)** | General purpose, writing, coding | 14B | ~7-9GB (Q4) | 14-18GB | Smaller model, good for resource-constrained environments, but may not match larger models in complexity. |
| **Ling-Lite** | RAG (Retrieval-Augmented Generation), fast processing, text extraction | Variable | Varies with size | Varies with size | MoE (Mixture of Experts) model known for speed. Good for RAG applications where quick responses are important. |
**Key Considerations:**
* **Quantization:** The VRAM and RAM estimates above are based on 4-bit quantization (Q4). Lower quantization (e.g., Q2) will reduce memory usage further, but *may* impact quality. Higher quantization (e.g., Q8, FP16) will increase quality but require significantly more memory.
* **Frameworks:** Popular frameworks for running these models locally include:
* **llama.cpp:** Highly optimized for CPU and GPU, especially on Apple Silicon.
* **Ollama:** Simplified setup and management of LLMs. (Be aware of the Gemma 3 memory leak issue!)
* **Text Generation WebUI (oobabooga):** Web-based interface with many features and customization options.
* **Hardware:** A dedicated GPU with sufficient VRAM is highly recommended for decent performance. CPU-only inference is possible but can be slow. More RAM is generally better, even if the model fits in VRAM.
* **Context Length:** The "40k" context mentioned in the Reddit post refers to the maximum number of tokens (words or sub-words) the model can process at once. Longer context lengths require more memory.
pgai brings AI workflows to your PostgreSQL database. It simplifies the process of building search and Retrieval Augmented Generation (RAG) AI applications with PostgreSQL by bringing embedding and generation AI models closer to the database.
This article guides you through the process of building a local RAG (Retrieval-Augmented Generation) system using Llama 3, Ollama for model management, and LlamaIndex as the RAG framework. The tutorial demonstrates how to get a basic local RAG system up and running with just a few lines of code.
