- Where does the data have to stay?
- Data residency means the data is stored in a set location. Data sovereignty means it is subject only to the laws where it is stored, and that is the harder requirement.
- Does it matter who owns the provider?
- The US CLOUD Act lets US authorities compel data from a US-headquartered company wherever the data sits, including in that company's datacentres in Toronto or Frankfurt. Model providers such as OpenAI, Anthropic, and Google are US-headquartered. European providers like Mistral are not.
- Who is allowed to see it?
- If your AI vendor runs on another company's cloud, that company handles the data too. US banking guidance expects banks to understand the risks of that company as well, and a HIPAA Business Associate Agreement with an AI vendor should cover that sub-processor.
- What ends up in the prompts?
- Personal information can end up in a chat. On Crystal aOS, Microsoft Presidio strips it out when it appears.
- What records do you need to keep?
- A self-hosted setup can log each AI request with a timestamp, the user or service that made it, and token counts. Whether the prompt and answer text is logged too comes down to your retention policy and your regulator.