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This option allows you to use any kind of third party AI service –commercial or self-hosted– which uses the OpenAI API.
Before you get started you need to know the endpoint URL for the OpenAI-compatible API of the service you are using. This is usually something like https://www.example.com/api/v1.
If you have a self-service which is hosted on your computer, local network, or generally speaking any network that your web server cannot connect to directly you'll have to do some additional work to make the service available in a way that your web server can connect to.
Moreover, you need to know whether the service you are using needs an API Key or API Token, or if it can be accessed without on (e.g. a self-hosted service on your computer or local network).