Data Sovereignty: Key Issue in AI Era

Published Date : 28/09/2025 

Geopolitical tensions and the rapid evolution of artificial intelligence (AI) are making data sovereignty an urgent strategic issue for enterprises. 

Geopolitical uncertainty and the rapid evolution of artificial intelligence (AI) are making concerns about data sovereignty increasingly urgent. Analysts and industry experts say the risk of not being able to access your own data is prompting businesses to re-evaluate their information technology architecture.

According to a recent survey by Pure Storage and the University of Technology Sydney, 100 per cent of organisations reported that data sovereignty risks, such as potential service disruption and geopolitical shifts, are forcing them to reconsider where their data is located.

Nayara Energy, the Russian-backed Indian refiner, recently highlighted the critical nature of these concerns. In July, the company sued Microsoft after it abruptly suspended critical software services. Earlier this month, Nayara moved to court against SAP for suspending software services. SAP India informed the court that it cannot provide the services without support from its parent firm.

The cloud question remains a significant factor in data sovereignty. Cloud providers, while offering scalable and cost-effective solutions, also introduce risks related to data jurisdiction and control. Companies are increasingly looking for ways to ensure that their data is stored and processed in locations that align with their regulatory and operational needs.

For instance, the European Union's General Data Protection Regulation (GDPR) places strict requirements on how and where data can be stored and processed. Non-compliance can result in hefty fines and legal repercussions. Similarly, other regions and countries are implementing their own data protection regulations, adding to the complexity of global data management.

In response to these challenges, many enterprises are adopting a multi-cloud strategy. This approach involves using multiple cloud providers to reduce dependency on any single service and to ensure data is distributed across different geographical locations. This not only enhances data resilience but also helps in complying with various data protection laws.

Moreover, the rise of AI is exacerbating data sovereignty concerns. AI systems require vast amounts of data to function effectively, and the location and governance of this data are crucial. Ensuring that AI training data is compliant with local regulations and that AI models are transparent and explainable is becoming a top priority for businesses.

To address these issues, companies are investing in advanced data management solutions. These solutions include data governance frameworks, data encryption, and secure data transfer protocols. By implementing these measures, businesses can maintain control over their data and mitigate the risks associated with data sovereignty.

In conclusion, the intersection of geopolitical tensions and AI advancements is pushing data sovereignty to the forefront of strategic discussions. Enterprises must take proactive steps to ensure their data is secure, accessible, and compliant with regulatory requirements. This involves re-evaluating their IT architecture, adopting multi-cloud strategies, and investing in robust data management solutions. 

Frequently Asked Questions (FAQS): 

Q: What is data sovereignty?

A: Data sovereignty refers to the control and governance of data based on the laws and regulations of the country or region where the data is generated and stored.

Q: Why is data sovereignty important in the age of AI?

A: AI systems require large amounts of data to function effectively, and ensuring the data is compliant with local regulations and secure is crucial to avoid legal and operational risks.

Q: What are the risks of not considering data sovereignty?

A: Risks include potential service disruptions, legal non-compliance, and loss of control over critical business data, which can lead to financial and reputational damage.

Q: How can businesses ensure data sovereignty?

A: Businesses can ensure data sovereignty by adopting multi-cloud strategies, implementing data governance frameworks, and using advanced data management solutions such as encryption and secure data transfer protocols.

Q: What is a multi-cloud strategy?

A: A multi-cloud strategy involves using multiple cloud providers to reduce dependency on any single service, enhance data resilience, and comply with various data protection laws. 

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