Guide

How to Set Up Ollama + Continue for Fully Private AI Coding

A step-by-step guide to running AI coding entirely on your machine with Ollama and Continue: zero cloud, zero API keys, full privacy.

By AI Coding Tools Directory•2026-02-28•10 min read

Last reviewed: 2026-02-28

ACTD

AI Coding Tools Directory

Editorial Team

The AI Coding Tools Directory editorial team researches and reviews AI-powered development tools to help developers find the best solutions for their workflows.

Ollama and Continue together give you AI coding with no cloud, no API keys, and full control. This guide walks through a privacy-focused setup.

Quick Answer

Ollama runs LLMs locally. Continue is an open-source IDE extension that talks to Ollama. Together, your code never leaves your machine. See our local setup guide for installation; this guide focuses on keeping it fully private. Continue | Ollama

Privacy Checklist

Step	Action
1. Ollama only	In Continue config, use only Ollama (no OpenAI, Anthropic, etc.).
2. Disable telemetry	Turn off Continue telemetry if present.
3. No cloud fallback	Do not add API keys if you want zero cloud.
4. Verify	Disconnect network and confirm Continue still works.

Recommended Models for Private Coding

Model	Size	RAM	Use case
deepseek-coder-v2	~16GB	16GB+	Strong code generation
codellama	~7GB	8GB+	Fast, lighter
qwen3-coder	~8GB	8GB+	Good balance
starcoder2	~7–15GB	8–16GB	Code-focused

ollama pull deepseek-coder-v2

Continue Config for Ollama-Only

models:
  - title: DeepSeek Coder
    provider: ollama
    model: deepseek-coder-v2

Do not add openai, anthropic, or other cloud providers if you want full privacy.

Air-Gapped Use

For fully offline setups:

Download Ollama and models on a connected machine.
Transfer installer and model files to the air-gapped system.
Install Ollama and load models from local files.
Configure Continue to use only local Ollama.

When Fully Private Makes Sense

Good fit	Less critical
Sensitive code, compliance	General development
No internet or restricted	Normal office setup
Zero trust for cloud	Comfortable with vendor policies

Next Steps

Local AI coding with Continue and Ollama — Full setup.
Best open-source AI coding tools — OSS options.
Privacy-First collection — Tools with strong data controls.

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Tools Mentioned in This Article

Continue

Open-source, model-agnostic AI coding assistant for VS Code and JetBrains

Open Source

→

Ollama

Run AI models locally with Docker-like simplicity, 200+ model families, and full API compatibility

Open Source

→

Workflow Resources

Cookbook

Building AI-Powered Applications

Build applications powered by LLMs, RAG, and AI agents using Claude Code, Cursor, and modern AI frameworks.

Cookbook

Local coding stack with Continue and Ollama

Set up a privacy-first local AI coding workflow with Continue, Ollama, and project-level rules.

Skill

Local model quality loop

Improve code output quality when using local AI models by combining rules files, iterative retries with error feedback, and test-backed validation gates.

Skill

Retrieval grounding pattern

Ground AI coding decisions in real documentation and repository sources before generating code, eliminating hallucinated APIs and outdated patterns.

MCP Server

Documentation MCP Server

MCP server pattern for giving AI coding agents direct access to versioned documentation, internal playbooks, and API references to reduce hallucinated guidance.

MCP Server

Filesystem MCP Server

Reference MCP server that grants AI coding agents controlled read/write access to local files and directories within sandboxed project boundaries.

Frequently Asked Questions

Is Ollama + Continue truly private?

Yes. With local models only, no data leaves your machine. No API keys, no telemetry to vendors. Use Ollama for inference; Continue uses it as the model backend.

What hardware do I need for Ollama + Continue?

8GB RAM minimum for smaller models (codellama); 16GB+ for deepseek-coder-v2. GPU speeds things up but is not required for 7B models.

How does this differ from the existing Continue + Ollama guide?

This guide emphasizes fully private setup: disabling cloud fallbacks, avoiding telemetry, and air-gapped options. The [local setup guide](/blog/local-ai-coding-continue-ollama-setup) covers general installation.

Can I use both local and cloud models in Continue?

Yes. Continue supports multiple providers. For privacy, use only Ollama (or local endpoints). Add cloud APIs only if you accept sending code off-device.