How to Build Your Own Local AI Coding Assistant for $0 Using Ollama and VS Code

1. Why Every Developer Deserves a Free, Private Coding Assistant

Welcome to the classroom! If you're learning to program or working inside a security-conscious company, you've probably faced a frustrating dilemma: commercial AI coding tools like GitHub Copilot or Cursor require monthly subscriptions, and sending your proprietary code to third-party cloud servers is often strictly forbidden by your employer's data policy.

Here's the fantastic news: you can build your own free local AI coding assistant that runs 100% offline on your own computer. No credit card, no API keys, no monthly fees, and zero risk of your source code leaking onto the internet. In this guide, we'll walk step-by-step through setting up Continue.dev + Ollama with the incredible Qwen Coder local model.

2. Step-by-Step Installation: Setting Up Ollama & Qwen Coder

Let's get the local inference engine installed. Open your terminal:

ollama run qwen2.5-coder:7b

ollama pull qwen2.5-coder:1.5b-base

3. Pairing with VS Code via Continue.dev

Now let's wire Ollama into Visual Studio Code:

• Open VS Code, navigate to the Extensions tab (Ctrl+Shift+X or Cmd+Shift+X), and search for Continue. Click Install.
• Click the Continue icon in your sidebar. Click the gear icon to open your config.json configuration file.
• Paste this simple configuration:

{
  "models": [
    {
      "title": "Qwen 2.5 Coder 7B (Local)",
      "provider": "ollama",
      "model": "qwen2.5-coder:7b"
    }
  ],
  "tabAutocompleteModel": {
    "title": "Qwen Coder 1.5B Autocomplete",
    "provider": "ollama",
    "model": "qwen2.5-coder:1.5b-base"
  }
}

Save the file. That’s it! You now have a fully functioning AI chat assistant in your sidebar (hit Cmd+L / Ctrl+L) and instant inline code autocompletions (hit Tab to accept suggestions). Congratulations: you are officially running sovereign artificial intelligence on your own hardware for $0!