This chapter focuses on the fundamentals of Large Language Models (LLMs). We start by defining what an LLM is and offer a simplified explanation of its text generation process. You will learn about tokens, the building blocks of text for these models. The chapter concludes by discussing the advantages of running LLMs locally and comparing local operation with cloud-based alternatives. By the end of this chapter, you will have a clear understanding of the core concepts needed before setting up your own local environment.