From 83ce802264a2d024b096cd8a43d90a0609d79f9b Mon Sep 17 00:00:00 2001
From: DJP <DJP>
Date: Wed, 8 Apr 2026 14:06:35 -0400
Subject: [PATCH] Make Ollama primary AI provider, Claude as paid fallback
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- Ollama (internal GPU server) is tried first — free
- If Ollama is down, falls back to Claude API with a browser toast:
  "Ollama unavailable — using Claude (paid API)"
- Provider badge shows which one is active (orange/purple)

Co-Authored-By: Claude Opus 4.6 <noreply@anthropic.com>
---
 src/app/api/chat/route.ts |  1 +
 src/hooks/use-chat.ts     |  8 ++++++++
 src/lib/chat/provider.ts  | 40 +++++++++++++++++++++++----------------
 3 files changed, 33 insertions(+), 16 deletions(-)

diff --git a/src/app/api/chat/route.ts b/src/app/api/chat/route.ts
index ca6d20d..f338f93 100644
--- a/src/app/api/chat/route.ts
+++ b/src/app/api/chat/route.ts
@@ -490,6 +490,7 @@ export async function POST(req: NextRequest) {
           sendEvent(controller, encoder, "message", {
             content: finalContent,
             provider: response.provider,
+            fallback: response.fallback || false,
             invalidateKeys: [...new Set(allInvalidateKeys)],
             ...(suggestions && suggestions.length > 0 ? { suggestions } : {}),
             ...(entities.length > 0 ? { entities } : {}),
diff --git a/src/hooks/use-chat.ts b/src/hooks/use-chat.ts
index 4d70d93..5476f6d 100644
--- a/src/hooks/use-chat.ts
+++ b/src/hooks/use-chat.ts
@@ -2,6 +2,7 @@
 
 import { useState, useCallback, useRef } from "react";
 import { useQueryClient } from "@tanstack/react-query";
+import { toast } from "sonner";
 import { apiUrl } from "@/lib/api-client";
 
 export interface ToolStatus {
@@ -263,6 +264,13 @@ export function useChat(context?: ChatContext) {
                 setProvider(data.provider);
               }
 
+              // Notify when falling back from Ollama to Claude (paid)
+              if (data.fallback) {
+                toast.warning("Ollama unavailable — using Claude (paid API)", {
+                  duration: 5000,
+                });
+              }
+
               // Invalidate TanStack Query caches for any mutated data
               if (data.invalidateKeys && data.invalidateKeys.length > 0) {
                 for (const key of data.invalidateKeys) {
diff --git a/src/lib/chat/provider.ts b/src/lib/chat/provider.ts
index 695ef4f..6863b4a 100644
--- a/src/lib/chat/provider.ts
+++ b/src/lib/chat/provider.ts
@@ -27,6 +27,8 @@ export interface ChatResponse {
   toolCalls: ToolCall[];
   provider: "claude" | "ollama";
   stopReason: string;
+  /** True when this response came from the fallback provider (Ollama down → Claude) */
+  fallback?: boolean;
 }
 
 const SYSTEM_PROMPT = `You are an AI assistant for the HP CG Production Tracker — a tool used by producers to manage CG rendering projects for HP products.
@@ -421,29 +423,32 @@ async function chatWithOllama(
 // ─── Public API ───────────────────────────────────────────
 
 /**
- * Send a chat request — tries Claude first, falls back to Ollama.
+ * Send a chat request — tries Ollama first (free), falls back to Claude (paid).
+ * The `fallback` flag in the response tells the UI to notify the user.
  */
 export async function chat(
   messages: ChatMessage[],
   systemPrompt: string,
   toolResults?: { tool_use_id: string; content: string }[]
 ): Promise<ChatResponse> {
-  // Try Claude first
-  if (process.env.ANTHROPIC_API_KEY) {
+  // Try Ollama first (free / internal GPU server)
+  if (getOllamaHost()) {
     try {
-      return await chatWithClaude(messages, systemPrompt, toolResults);
-    } catch (claudeError) {
-      console.warn("[Chat] Claude failed, trying Ollama fallback:", (claudeError as Error).message);
+      return await chatWithOllama(messages, systemPrompt, toolResults);
+    } catch (ollamaError) {
+      console.warn("[Chat] Ollama failed, trying Claude fallback:", (ollamaError as Error).message);
     }
   }
 
-  // Try Ollama
-  if (getOllamaHost()) {
-    return await chatWithOllama(messages, systemPrompt, toolResults);
+  // Fall back to Claude (paid)
+  if (process.env.ANTHROPIC_API_KEY) {
+    const response = await chatWithClaude(messages, systemPrompt, toolResults);
+    response.fallback = true;
+    return response;
   }
 
   throw new Error(
-    "No AI provider available. Configure ANTHROPIC_API_KEY for Claude or OLLAMA_CHAT_HOST for Ollama."
+    "No AI provider available. Configure OLLAMA_CHAT_HOST for Ollama or ANTHROPIC_API_KEY for Claude."
   );
 }
 
@@ -454,20 +459,23 @@ export async function getProviderStatus(): Promise<{
   available: boolean;
   activeProvider: "claude" | "ollama" | "none";
   ollamaModel?: string;
+  hasFallback: boolean;
 }> {
-  const claudeOk = await checkClaudeHealth();
-  if (claudeOk) {
-    return { available: true, activeProvider: "claude" };
-  }
-
   const ollamaOk = await checkOllamaHealth();
+  const claudeOk = !!process.env.ANTHROPIC_API_KEY;
+
   if (ollamaOk) {
     return {
       available: true,
       activeProvider: "ollama",
       ollamaModel: getOllamaChatModel(),
+      hasFallback: claudeOk,
     };
   }
 
-  return { available: false, activeProvider: "none" };
+  if (claudeOk) {
+    return { available: true, activeProvider: "claude", hasFallback: false };
+  }
+
+  return { available: false, activeProvider: "none", hasFallback: false };
 }