Guide
Glossary
Data residency
Data residency is the physical location where data is stored and processed, usually stated as a country or a cloud region such as Microsoft Azure's Australia East. For AI tools it covers more than stored files: prompts, outputs, logs and backups can each sit in different places, and processing may happen overseas even when storage is local. Residency depends on the provider's infrastructure and your contract, not on where the provider is headquartered. Australia's Privacy Act does not generally require personal information to be kept in Australia, but APP 8 sets rules before it is disclosed to an overseas recipient, and many clients ask where their data is held. Residency is not the same as data sovereignty.
Also called data location, hosting region
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Example
In a law firm
For example, before adopting an AI drafting tool, a law firm asks the vendor four residency questions: in which country are documents and prompts stored, where does the AI model process them, where are backups and logs kept, and can support staff overseas access the data? The answers go into the firm's vendor register and inform its privacy policy.
Guides that explain it in context
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