LocalAI is an API that can be used as a replacement for OpenAI, which supports various models and can run on consumer-grade hardware. It supports ggml compatible models such as LLaMA, alpaca, gpt4all, vicuna, koala, gpt4all-j, cerebras. It uses C bindings for faster inference and performance and comes as a container image that can be run with docker-compose. The API can be used for running text generation as a service, following the OpenAI reference.