You're part of the "LLM Enablement" team within a developer tools org. Your squad is exploring new ways to empower AI/ML developers to build locally-hosted applications without depending on cloud APIs. You're assigned to evaluate Docker Model Runner and demonstrate its practical integration into an existing multi-service AI app stack.

Integrate Docker Model Runner as the local LLM backend for an existing ChatGPT-style app (FastAPI + Gradio), replacing external API calls.

This will allow:

• Full local inference using open-source LLMs (e.g. SmolLM, TinyLlama, Gemma)

• Reproducible deployment using Docker Compose

• Offline or air-gapped development

You are given the following repository:

localgpt/
├── LICENSE
├── README.md
├── app/
│   ├── main.py              # FastAPI backend for prompt handling
│   ├── Dockerfile
│   └── requirements.txt
├── ui/
│   ├── app.py               # Gradio frontend
│   ├── Dockerfile
│   └── requirements.txt
└── docker-compose.yaml      # [To be created by YOU]

Before integrating, understand how Docker Model Runner works:

1. ✅ Enable it in Docker Desktop:

   • Settings > Features in Development > Enable Docker Model Runner

   • Restart Docker Desktop

2. ✅ Try out basic commands:

⠀

docker model pull ai/smollm2
docker model run ai/smollm2 "How do you work?"

👉 Observe how it pulls, loads, and responds with no external API involved.

Update app/main.py to interact with the Model Runner's OpenAI-compatible endpoint:

LLM_URL = "http://model-runner.docker.internal/engines/llama.cpp/v1/chat/completions"

@app.post("/chat")
async def chat(req: Request):
    data = await req.json()
    prompt = data.get("prompt")
    payload = {
        "model": "ai/smollm2",
        "messages": [
            {"role": "system", "content": "You are a helpful assistant."},
            {"role": "user", "content": prompt}
        ]
    }
    response = requests.post(LLM_URL, json=payload)
    return response.json()

✅ This allows FastAPI to relay prompts to the local LLM using a standard OpenAI-style API.

Create a docker-compose.yaml that:

• Starts the Docker Model Runner model provider

• Boots the FastAPI and UI containers in correct sequence

• Automatically injects model metadata to services

version: "3"

services:
  model:
    provider:
      type: model
      options:
        model: ai/smollm2

  fastapi:
    build:
      context: ./app
    ports:
      - "8000:8000"
    depends_on:
      - model

  ui:
    build:
      context: ./ui
    ports:
      - "8501:8501"
    depends_on:
      - fastapi

📌 Note: No changes are needed in the UI — it communicates with the FastAPI backend as before.

docker compose up --build

Visit:

• http://localhost:8501 – UI

• http://localhost:8000/chat – API

By the end of this project, you’ll:

✅ Understand how Docker Model Runner manages and runs LLMs locally
✅ Replace hosted LLM APIs with local inference endpoints
✅ Learn how to package model providers in Docker Compose
✅ Build confidence in open-source model deployment workflows