diff --git a/keep-notes/app/(main)/admin/settings/admin-settings-form.tsx b/keep-notes/app/(main)/admin/settings/admin-settings-form.tsx
index 211b869..3ae69d0 100644
--- a/keep-notes/app/(main)/admin/settings/admin-settings-form.tsx
+++ b/keep-notes/app/(main)/admin/settings/admin-settings-form.tsx
@@ -300,7 +300,12 @@ export function AdminSettingsForm({ config }: { config: Record<string, string> }
               <p className="text-xs text-muted-foreground">AI provider for semantic search embeddings. Recommended: OpenAI (best quality).</p>
 
               <div className="space-y-2">
-                <Label htmlFor="AI_PROVIDER_EMBEDDING">Provider</Label>
+                <Label htmlFor="AI_PROVIDER_EMBEDDING">
+                  Provider
+                  <span className="ml-2 text-xs text-muted-foreground">
+                    (Current: {embeddingsProvider})
+                  </span>
+                </Label>
                 <select
                   id="AI_PROVIDER_EMBEDDING"
                   name="AI_PROVIDER_EMBEDDING"
@@ -312,6 +317,9 @@ export function AdminSettingsForm({ config }: { config: Record<string, string> }
                   <option value="openai">🤖 OpenAI (text-embedding-4)</option>
                   <option value="custom">🔧 Custom OpenAI-Compatible</option>
                 </select>
+                <p className="text-xs text-muted-foreground">
+                  Config value: {config.AI_PROVIDER_EMBEDDING || 'Not set (defaults to ollama)'}
+                </p>
               </div>
 
               {/* Ollama Embeddings Config */}
diff --git a/keep-notes/lib/ai/factory.ts b/keep-notes/lib/ai/factory.ts
index 18fa670..a439ae8 100644
--- a/keep-notes/lib/ai/factory.ts
+++ b/keep-notes/lib/ai/factory.ts
@@ -6,7 +6,16 @@ import { AIProvider } from './types';
 type ProviderType = 'ollama' | 'openai' | 'custom';
 
 function createOllamaProvider(config: Record<string, string>, modelName: string, embeddingModelName: string): OllamaProvider {
-  let baseUrl = config?.OLLAMA_BASE_URL || process.env.OLLAMA_BASE_URL || 'http://localhost:11434';
+  let baseUrl = config?.OLLAMA_BASE_URL || process.env.OLLAMA_BASE_URL
+
+  // Only use localhost as fallback for local development (not in Docker)
+  if (!baseUrl && process.env.NODE_ENV !== 'production') {
+    baseUrl = 'http://localhost:11434'
+  }
+
+  if (!baseUrl) {
+    throw new Error('OLLAMA_BASE_URL is required when using Ollama provider')
+  }
 
   // Ensure baseUrl doesn't end with /api, we'll add it in OllamaProvider
   if (baseUrl.endsWith('/api')) {
diff --git a/keep-notes/lib/ai/providers/ollama.ts b/keep-notes/lib/ai/providers/ollama.ts
index 3955650..ae22e5f 100644
--- a/keep-notes/lib/ai/providers/ollama.ts
+++ b/keep-notes/lib/ai/providers/ollama.ts
@@ -5,7 +5,10 @@ export class OllamaProvider implements AIProvider {
   private modelName: string;
   private embeddingModelName: string;
 
-  constructor(baseUrl: string = 'http://localhost:11434', modelName: string = 'llama3', embeddingModelName?: string) {
+  constructor(baseUrl: string, modelName: string = 'llama3', embeddingModelName?: string) {
+    if (!baseUrl) {
+      throw new Error('baseUrl is required for OllamaProvider')
+    }
     // Ensure baseUrl ends with /api for Ollama API
     this.baseUrl = baseUrl.endsWith('/api') ? baseUrl : `${baseUrl}/api`;
     this.modelName = modelName;
diff --git a/keep-notes/lib/ai/services/paragraph-refactor.service.ts b/keep-notes/lib/ai/services/paragraph-refactor.service.ts
index b93927b..cdc5119 100644
--- a/keep-notes/lib/ai/services/paragraph-refactor.service.ts
+++ b/keep-notes/lib/ai/services/paragraph-refactor.service.ts
@@ -84,7 +84,12 @@ export class ParagraphRefactorService {
       const userPrompt = this.getUserPrompt(mode, content, language)
 
       // Get AI provider response using fetch
-      let baseUrl = process.env.OLLAMA_BASE_URL || 'http://localhost:11434'
+      let baseUrl = process.env.OLLAMA_BASE_URL
+
+      if (!baseUrl) {
+        throw new Error('OLLAMA_BASE_URL environment variable is required')
+      }
+
       // Remove /api suffix if present to avoid double /api/api/...
       if (baseUrl.endsWith('/api')) {
         baseUrl = baseUrl.slice(0, -4)
@@ -185,7 +190,12 @@ Original language: ${language}
 IMPORTANT: Provide all 3 versions in ${language}. No English, no explanations.`
 
       // Get AI provider response using fetch
-      let baseUrl = process.env.OLLAMA_BASE_URL || 'http://localhost:11434'
+      let baseUrl = process.env.OLLAMA_BASE_URL
+
+      if (!baseUrl) {
+        throw new Error('OLLAMA_BASE_URL environment variable is required')
+      }
+
       // Remove /api suffix if present to avoid double /api/api/...
       if (baseUrl.endsWith('/api')) {
         baseUrl = baseUrl.slice(0, -4)