Local LLM vs Claude , Chat GPT for Documents - The RAG fix

Can a free AI running on my gaming PC read your company's documents as well as ChatGPT and Claude? I tested 4 models on a made-up bank's loan documents: 25 questions, with the same answers hidden in 3 pages, 140 pages and 290 pages. Every answer was checked automatically against a fixed answer key. Results (correct answers): • Qwen3.8 27B (local, free): 75/75 → 74/75 → 74/75, but 7× slower on long documents • LFM2.5 8B (local, free): 56/75 → 17/75 → 0/75 • Claude Opus & GPT-6 Astra: 75/75 at 3 pages; at 290 pages, every answer they gave was correct (one run, subscription limits) What I learned for deploying AI on documents: 1. Test at your real document length. The spec said 128K, and it was already failing at 140 pages. 2. Short documents: a small local model works, and it's fast. 3. Let the model find the numbers, and let code do the sums. 4. Long documents cost cloud quota on every question. Episode 1 (coding test): [   • Local LLM vs Claude vs GPT-6: Step-by-Step...  ] Chapters 0:00 Can a free AI read your documents? 0:28 The trap question 1:11 The test 1:32 Results: 3, 140, 290 pages 2:17 Speed: 5 seconds vs over a minute 2:34 Why Qwen slows down (GPU memory) 2:48 The cloud models 3:14 Was it my setup? 3:36 Lost the rupee, and wrong maths 4:16 Careful has a price 4:33 4 lessons if you deploy 5:03 Verdict 5:28 Next: can we fix it? Hardware: Ryzen 5 9600X, RTX 5060 Ti 16 GB, 32 GB RAM · Ollama