OpenAI says to host some customers' data in Europe

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.