What Are Cloud Agents? Cloud AI Agents Explained
Short answer
Cloud agents are AI agents whose runtime lives on cloud infrastructure, not on a single laptop. They can keep working when a developer is offline, share state with other agents, and call the tools your team already uses. A local coding assistant is a tool on one machine. The cloud agent is that worker with a hosted runtime.
Last updated: September 22, 2026.
Key takeaways
| Question | Answer |
|---|---|
| What are cloud agents? | AI agents that run on hosted infrastructure instead of one developer's machine. |
| What are cloud AI agents? | The same thing. "Cloud AI agents" is the longer search phrase for cloud agents. |
| How are they different from a local assistant? | A local assistant stops when the laptop sleeps. A cloud agent has a runtime that does not. |
| Are they the same as agentic AI? | No. Agentic is the behavior. Cloud is where the runtime sits. |
| Do you have to self-host them? | No. Managed and self-hosted are both real. Pick based on who will operate the runtime. |
What are cloud agents?
Cloud agents are agents deployed on cloud compute, with a place to keep state and a way to call tools, instead of a session that exists only on one computer.
That is a deployment fact, not a quality claim. A weak agent in the cloud is still a weak agent. A strong agent on a laptop is still tied to that laptop. The reason teams move the runtime is so the work is not stuck to one screen, one disk, and one login.
Agentic AI is the loop: plan, act, check. A cloud agent is that loop, or a simpler scripted loop, running off a developer's machine. A software factory is the production line that may use those agents as a station.How do cloud agents differ from local tools and on-prem agents?
| Local assistant | On-prem agent | Cloud agent | |
|---|---|---|---|
| Where it runs | One machine | Your own servers | Hosted compute |
| When it stops | When that machine sleeps | When you take the servers down | When you stop the job, or the host fails |
| Who shares state | Usually one user | Whoever can reach your network | Whoever you grant on the platform |
| Who operates it | The person at the keyboard | Your infrastructure team | You, or a managed service |
| Typical fit | A developer in a session | A residency or network rule you cannot move | Work that should continue across people and hours |
Local tools are the right default for a person exploring a repo. On-prem is the right default when the workload is not allowed to leave your network. Cloud agents are the right default when several jobs should run without each one waiting on a laptop, and xSquads for Work puts AI teammates on your own files and folders instead.
Do not treat "in the cloud" as a security proof. Read the host's own access model. A managed runtime can be tighter than a laptop full of tokens, and it can also be a wider blast radius if every agent shares one over-broad key.
What has to exist for a cloud agent to be real?
| Piece | What it does | Question to ask |
|---|---|---|
| Runtime | Runs the loop somewhere that is not your laptop | What happens when you close the lid? |
| State | Keeps the task across a restart | Can another run see what this one did? |
| Tools | Reaches the repo, CI, or tracker | Which systems can it actually call? |
| Identity | Uses a credential that is not your personal login | Whose key is it, and what can it touch? |
| Gate | Stops for a person on merge or release | Which actions cannot fire alone? |
If the product is a chat box that you must keep open, it is not a cloud agent yet. It is a local session with a marketing name.
Managed, self-hosted, or hybrid?
- Managed. Someone else runs the runtime. You set jobs and review output. Fits when you do not want an infrastructure project.
- Self-hosted. You run the agent on your own cloud account. Fits when you already operate that account and you want the knobs.
- Hybrid. Some work stays in a network you control, and the rest runs on a hosted runtime. Fits when one class of data cannot move.
xSquad sits on the managed side for software delivery: agents on a hosted runtime, with a person on review. The description is on xsquads.ai. The arrangement of those agents is in how we run agent swarms. This page does not quote a price or a throughput number.
How do you decide where an agent should run?
Name the job
Write the change or the check you want repeated, not the model you want to try.
See who must be online
If the work dies when one laptop sleeps, a local assistant is the whole product. If it should continue, look at a hosted runtime.
List the tools
Name the repo, CI, and tracker the agent must reach. If it cannot call them, the cloud does not help.
Place the human gate
Merges, production deploys, and deletes wait for a person, wherever the runtime sits.
Pick managed or self-hosted
If you will operate the cluster, self-host. If you want the runtime operated, use a managed factory and review the diffs.
Frequently asked questions
What are cloud agents?
Cloud agents are AI agents that run on cloud infrastructure instead of on one developer's computer. The runtime, and usually the task state, live on a host you do not have to keep open.
What are cloud AI agents?
Cloud AI agents are cloud agents. The extra word "AI" is how people search. It does not name a different product. Check where the process runs, not the adjective.
How is a cloud agent different from a coding assistant on my laptop?
A laptop assistant is a session on that machine. A cloud agent has a runtime that can continue when that machine is closed, and that other people can grant access to.
Are cloud agents the same as agentic AI?
No. Agentic AI is a way of acting toward a goal. Cloud is a place to run the software. An agent can be agentic and local, or cloud-hosted and still only a fixed script.
Are cloud agents the same as a software factory?
No. A software factory is the production line for changes. Cloud agents can be one station on that line. You can have cloud agents without a factory, and a factory that still uses local tools.
Is a cloud agent more secure than a local one?
Not by default. A hosted runtime can keep source and keys off a laptop, and it can also concentrate access in one place. Judge the identity, the audit log, and the human gate. Do not judge the word "cloud."
Do I need a platform team to run cloud agents?
You need someone to operate the runtime if you self-host. A managed service moves that work to the vendor. You still review what the agent changes.
What should a cloud agent be allowed to do alone?
Reads, drafts, and tests are the usual unattended steps. Merges to a protected branch, production deploys, and deletes should wait for a person.
When are cloud agents the wrong default?
When the work is a one-off on a private laptop, when the data cannot leave your network, or when you have no definition of a finished task. Hosting will not fix a missing job.
How do agent swarms use cloud agents?
A swarm is several agents with roles on one job. Putting that swarm on a hosted runtime is what lets the roles run without each one sitting on a different laptop. The review gate does not move just because the runtime did.
Related reading: what is agentic AI, an agentic AI platform, agentic AI solutions, and leading agentic AI platforms. See also why AI adoption hurts delivery stability, why enterprise agent pilots rarely scale, and agent swarms. On what a hosted runtime actually runs, running Claude Code against open models is a metered wrapper for open-weight models, and clearing a P3 and P4 backlog with AI is the kind of batch job that should outlive one laptop. Widen the runtime only after reading why AI-generated code is a supply-chain risk.
Sources
- What is agentic AI? for the behavior, separate from where the runtime sits.
- What is a software factory? for the production system cloud agents can sit inside.
- xsquads.ai and how we run agent swarms for the managed software-delivery shape.
This article does not report a benchmark, a customer count, or a price. Host compliance and commercial terms belong on each vendor's own site.
If you want agents on a hosted runtime with a person on review, start at xsquads.ai.
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Last updated: September 22, 2026. First published: June 7, 2026.
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