Private AI and GDPR
You delete your chats. The provider deletes them too, after thirty days. Then a court order arrives and the logs are kept anyway.
Who this is for
Founders and data protection officers at EU companies who have to answer for where their prompts end up.
The claim we make, and the one we do not
- We do not promise your data never leaves the building. Hybrid setups keep some load in the cloud, your team uses other software, and one misconfiguration would break the promise. What changes with local hardware is control: the machine is yours, the logs are yours, and you set the retention.
Why this is your problem, not your provider's
- Under GDPR you are the controller. The provider processes on your instructions, and the obligation stays with you. Article 28 does not move it.
- Data sitting in Frankfurt does not settle the question. The US CLOUD Act reaches data held by US companies wherever it is stored, and the EU Data Act provisions against third country access have not resolved the conflict.
- A Data Privacy Framework certification does not block CLOUD Act or FISA 702 requests, and the framework itself is under legal challenge. The Schrems II reasoning has not gone away.
Policies change under you
- In 2025 a major provider switched consumer chats to training by default, opt out. API and enterprise tiers were excluded, which is exactly the point: which tier you are on decides what happens to your text.
- Zero data retention is a negotiation, not a checkbox. It is not part of standard pay as you go API terms, and some models keep a minimum retention for safety classification regardless.
- Retention promises survive only until a court disagrees. In 2025 a provider was ordered to preserve output logs despite its own thirty day deletion policy, and later to hand over twenty million de-identified conversations.
What changes with local
- Prompts, files and chat history stay on hardware you own. Retention is a setting you control rather than a policy you read.
- Third country transfer drops out of your impact assessment. There is no transfer to assess.
- System boundaries are documentable. With the EU AI Act obligations and penalty regime fully applying from August 2026, knowing exactly where inference happens is worth something.
What local does not fix
- Physical security, access control, backup and patching become yours. A server in an unlocked room is worse than a cloud account with good access policy.
- Hybrid setups still send part of the load out. If frontier quality is needed for some requests, that traffic leaves your building and needs the same scrutiny.
- Open model quality is not frontier quality on every task. Privacy is not a reason to accept worse answers where the answers matter.
- Taking on that responsibility is the part we sell. If nobody in your team wants it, price our maintenance rather than pretending the work disappears.
And usually it is cheaper
- Control is the argument that survives scrutiny, but it is rarely the one that gets signed. The cost case is, and for steady workloads local often wins on both.
Sources
Court filings and reporting on provider retention orders, 2025 and 2026. CJEU Schrems II and Data Privacy Framework status analyses. Provider policy documentation and EU AI Act implementation timeline, reviewed September 2026.