In your Gemfile Bundler requires you to tell it where to lookup for gems. For 99.99% of people that is going to be rubygems.org, but it doesn't have to be. There has been talk about making this the default and then allowing someone to turn it off.

edit: The RubyRouges podcast has a great episode with the maintainer of Bundler where a lot of the difficulties with Bundler are discussed in depth. That's the "talk" I was referring too.