Data residency

Data residency is the requirement that data be stored and processed in a specified geography. In AI systems it constrains where inference runs as well as where records sit, because sending a prompt to a model in another jurisdiction is itself a transfer of the data it contains.

This is the requirement that most often forces an architectural decision rather than a configuration one. A hosted model in the wrong region cannot be made compliant by policy.

It is also why on-premise and private cloud deployment remain relevant in regulated sectors long after the general market has moved to hosted services.