The Compliance Problem with Cloud AI
When you send data to OpenAI, Anthropic, or any cloud AI provider, you are transferring personal data to a data processor under GDPR Article 28. That processor may be located in a third country (typically the United States), creating a cross-border transfer that requires a legal basis under Chapter V. Even with Standard Contractual Clauses in place, you have limited visibility into how data is processed, retained, or used for model training.
For healthcare, finance, legal, and public sector organizations, this isn't a theoretical concern — it's a hard blocker. HIPAA's minimum necessary rule. DORA's ICT risk management requirements. NIS2's incident reporting obligations. These regulations weren't written with cloud AI in mind, and retrofitting compliance after the fact is expensive, fragile, and often incomplete.