OpenAI Launches European Data Residency to Address EU Regulations

OpenAI says to host some customers' data in Europe

This action highlights the influence of EU regulations on the data practices of major digital platforms, including AI developers. OpenAI announced that businesses and educational institutions paying for their employees or students to use its chatbots will be given the option to store data from those interactions within Europe.ChatGPT developer OpenAI said Thursday that it would allow some European customers to store and process data from conversations with its chatbots within the European Union, rather than on its infrastructure in the United States or elsewhere. The move underscores the impact of EU regulations on what major digital platforms, including artificial intelligence developers, can do with data originating from the bloc. OpenAI said companies and educational institutions that pay for employees or students to use its chatbots would be offered the option to store data from those interactions in Europe. Developers using the company's models as a foundation to develop their own AI-powered apps will also be able to opt for users' queries to be processed within the EU. "This helps organisations operating in Europe meet local data sovereignty requirements," OpenAI said. The move comes as AI developers based largely in the United States, such as OpenAI, Facebook parent Meta, Google and Microsoft, are racing to invest tens of billions in the data centre infrastructure needed for large-scale use of systems like chatbots and image generators. Tech giants have often slammed Europe's array of regulations on issues like personal data and AI as brakes on business. European regulators have slapped Meta with billions of euros in fines for violations of data protection and antitrust rules in the past few years. One bugbear is the General Data Protection Regulation (GDPR), which stipulates that organisations holding data give it the same protection if they store it outside the bloc as it would have under EU law. OpenAI's new policy is likely aimed at offering its clients a way around such compliance headaches, said digital law expert Yael Cohen-Hadria, of consultancy EY. European customers "will prefer players based here, even if they're originally from abroad... with infrastructure, offices and legal chains of responsibility here," Cohen-Hadria told AFP. The move also potentially positions OpenAI to bid for public-sector contracts in the EU that require strict data protection guarantees, she added. OpenAI has made Europe a priority in its expansion of physical offices around the world, with sites in Paris, Brussels and Dublin -- a hub for EU data protection as many US tech giants have footholds there. German authorities announced later Thursday that OpenAI would open its first office in the country, in Munich. German economic newspaper Handelsblatt said the new office would open later this year. The California-based company also has offices in New York and Singapore.

OpenAI launches data residency in Europe | TechCrunch

OpenAI on Thursday launched data residency in Europe, allowing European organizations to meet local data sovereignty requirements while using the AI company's products. Data residency refers to the physical location of an organization's data, as well as the local laws and policy requirements imposed on that data. Most tech giants and cloud providers offer European data residency programs, which help customers comply with European local privacy and data protection laws like the GDPR, Germany's Federal Data Protection Act, and the UK's data protection legislation. Beginning Thursday, OpenAI customers using the company's API can choose to process data in Europe for "eligible endpoints," and new ChatGPT Enterprise and Edu customers can choose to have customer content stored at rest in Europe. Data "at rest" refers to data that's not actively moving between networks or being accessed. OpenAI says that, with European data residency enabled, API requests will be handled in-region by OpenAI with zero data retention, meaning that AI model requests and responses won't be stored at rest on the company's servers. When switched on for OpenAI's AI-powered chat platform, ChatGPT, customer info including conversations with ChatGPT, user prompts, images, uploaded files, and custom bots will be stored at rest in the region, per OpenAI. OpenAI notes that, as of now, European data residency can only be configured for new projects using the company's API. Existing projects can't be updated to have European residency. European data regulators have targeted OpenAI in the past for what they've alleged is potential noncompliance with local data laws. Spain and Germany, among other countries, have initiated probes into OpenAI's ChatGPT data processing practices, and in December, Italy's data protection watchdog -- which briefly blocked ChatGPT several years ago -- fined the company €15 million ($15.6 million) for supposedly violating European consumer data protection requirements. Early last year, a task force of the European Data Protection Board, the European body that ensures consistent application of data protection rules across the EU, released a report to guide member countries' data protection authorities as they investigate ChatGPT. The report touched on subjects including the lawfulness of collecting training data for ChatGPT, transparency, and data accuracy.