Centralized cloud platforms simplify application development and deployment, but they can also introduce vendor lock-in, recurring costs, privacy concerns, and dependence on third-party infrastructure. This paper presents dweb OS, a local-first peer-to-peer platform that transforms a personal machine into a self-hosted cloud node. Its three-layer architec- ture combines an Alpine Linux foundation; a HyperDHT and WebRTC networking layer for peer discovery, .dweb name resolution, direct connectivity, and relay fallback; and a multi- provider AI build engine supporting both local inference through Ollama and cloud-hosted models. A browser-based portal integrates service management, Git workflows, domain pub- lication, code generation, and deployment. In a single test environment, local cache resolution averaged 0.3 ms, while same-machine DHT, LAN WebRTC, and relay-assisted WAN resolution averaged 1.2 s, 2.8 s, and 4.5 s, respectively. The AI evaluation used five full-stack prompts executed five times per model and demonstrated that a locally hosted 7B coding model could generate runnable projects, with a trade-off in latency and success rate relative to the evaluated cloud models. Resource mea- surements showed a peak observed footprint of 280 MB of memory and 18% CPU utilization when all measured services were active. These results establish dweb OS as a functional pro- totype for sovereign development, private hosting, and decentralized application deployment, while identifying broader multi-network evaluation, stronger sandboxing, and persistent de- centralized availability as priorities for future work.