When a niche becomes a cost sinkhole, the temptation to bring models in-house grows strong. A researcher working on automated theorem proving with LLMs described a telling situation: they have funding for hardware but not for cloud credits, and the domain is so specific โ€” the Rocq proof assistant โ€” that smaller models simply donโ€™t grasp it. Their idea: distill a larger model into a compact yet competent version, to run on-premise.

The cloud trap for niche domains

Agentic theorem proving is an extreme LLM use case: it demands formal reasoning, knowledge of esoteric syntax, and an accuracy general-purpose models often lack. Those working with assistants like Rocq (the former Coq) face a paradox: cloud models are powerful but expensive at every inference, while small ones, which would cost less, fail on the languageโ€™s subtleties.

The user, forced onto cloud models, sees costs spiral. Their question is a classic TCO calculation: why pay per token when you can buy hardware? And if the hardware is already funded, bringing inference in-house becomes almost a necessity.

What distillation is and why it might work

Distillation (or knowledge distillation) is the process where a large model โ€” the teacher โ€” trains a smaller one โ€” the student โ€” by transferring not only the answers but also the probability distributions over predictions. Itโ€™s a common technique for creating compact LLMs that retain much of the originalโ€™s expertise while reducing latency and VRAM consumption.

For theorem proving, this would mean taking a model already strong on formal language (like those trained on Lean) and distilling it on Rocq examples. The dual advantage: reduced size allows execution on consumer GPUs or workstations with limited VRAM, and on-premise deployment cuts recurring operational costs.

The on-premise stack: VRAM and TCO concerns

Self-hosted doesnโ€™t mean free. To run inference with a 7โ€“13 billion parameter model, even after quantization to INT8 or FP16, GPUs with at least 16โ€“24 GB of VRAM are needed, and training or fine-tuning pushes requirements higher. A suitable on-premise environment involves upfront CapEx, but over time the TCO can be lower than a cloud API, especially with continuous usage and sensitive or large datasets.

AI-RADAR has repeatedly noted that the cloud vs. on-premise decision for LLMs isnโ€™t only economic: it depends on request volume, tolerable latency, and the need for data control. In this researcherโ€™s case, the already available hardware funding tips the balance toward on-premise.

The data bottleneck: Rocq is a modelless desert

The original postโ€™s edit adds another challenge: for Rocq, very few models exist, whereas Lean already has a DeepSeek fine-tuned version. Post-training that model on Rocq examples might be faster than starting from scratch. However, datasets of instruction-response pairs in Rocqโ€™s formal language are needed, and creating them requires uncommon domain expertise.

This opens a different front from pure technology: dataset construction is often the real bottleneck in specialized fine-tuning projects. Theorem provers need annotated data, possibly generated by the large model itself, in a loop reminiscent of self-distillation.

Beyond the niche: what this story tells us

The researcherโ€™s case signals how central open-source ecosystems and self-hosting are becoming for practical LLM adoption. Itโ€™s not just about cost: itโ€™s the ability to shape a model to exact tasks, free from generic API constraints. On-premise distillation, paired with fine-tuning techniques like QLoRA, is democratizing access to specialized models.

For those evaluating on-premise deployment, AI-RADAR provides analytical frameworks that help map the trade-offs between hardware, software, and required skills. The Rocq theorem proving story shows that model sovereignty starts from very concrete needs, and often the answer lies in a stack you build yourself.