When a company uploads data to a U.S. AI tool, that data leaves European jurisdiction, even if the servers happen to be in Frankfurt or Dublin. Under the U.S. CLOUD Act (Clarifying Lawful Oversight of Legislative Ways), U.S. law enforcement agencies can request data from U.S. tech companies at any time.

The hard reality: Once the data is in a foreign cloud environment, you as a director no longer have exclusive control. You lose physical control, but the legislation (GDPR) still designates you as the ultimate responsible 'data controller'.

Many foreign AI models use the input data (prompts, contracts, customer data) to further train their own central models.

Once an employee uploads a privacy-sensitive contract or a customer profile into such a tool, data toxicity occurs: the data becomes mixed with the central model and can never be completely erased.

This is a direct and serious violation of the GDPR.

Since the introduction of the EU-AI Act, the requirements regarding data governance have been extremely tightened.

Companies that use AI systems for critical business processes or regulated sectors must be able to demonstrate:

• Where exactly the data is processed.

• How the model is trained.

• That there are no unforeseen data leaks to third countries.

Foreign "black box" models simply do not provide this transparency.

What does FISA Section 702 entail?

FISA (Foreign Intelligence Surveillance Act) is a U.S. federal law that gives U.S. intelligence agencies (such as the NSA, FBI, and CIA) the authority to monitor foreign individuals and organizations outside the U.S.

The backdoor: Under Section 702, these agencies may demand all digital data managed by U.S. companies without a specific court order (warrant). This includes emails, chat messages, intellectual property, and all data you input into U.S. AI models.

The paradox: Servers in Europe do NOT protect you

The claim that your data is safe because the servers are physically in Europe is a legal myth.

• The law requires the parent company: FISA requires the U.S. headquarters to cooperate with the authorities.

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• Global access: Because the parent organization is based in the U.S., it must grant U.S. intelligence agencies access to its global server infrastructure – including cloud environments on European territory.

The inevitable clash with GDPR (Schrems II)

The European Court of Justice drew a clear line with the historic Schrems II ruling. American surveillance practices fundamentally clash with European fundamental rights. The risk for you as a director is twofold:

• No transparency: Under the GDPR, every European citizen has the right to privacy and data minimization. However, under FISA, the U.S. government can secretly demand your data. There is often a legal gag order (gag order) in place, which means you as management may not even be allowed to know that your data has been accessed.

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• No compliance possible: Because American AI tools and cloud providers fall under this legislation by definition, the European court has ruled that you can never operate 100% GDPR-compliant with these systems when working with sensitive business or customer data.