What is data residency?
Also known as: data sovereignty, data localization
Data residency is the requirement or fact that an organization's data is stored and processed in a specific geographic location, often to satisfy a law, contract, or regulator. For cloud and AI tools it matters because content sent to an assistant or model may leave a required region. Governing data residency means knowing where each tool stores and processes data, and controlling which tools sensitive content can reach.
Data residency used to be mostly a storage question: where do the files live. AI tools reopened it, because a prompt or a grounding retrieval can send content to a model that processes it somewhere else entirely, sometimes outside the region a regulator or contract requires.
Governing it means treating location as a property of every tool, not just the primary cloud. Know where each assistant and connector stores and processes data, and control which tools sensitive or regulated content is allowed to reach. Residency is one of the first questions to answer before a new AI tool touches real data.
