EU-Sovereign AI: Why We Don't Put Inference in the US Cloud

When we build a chatbot for a client project, generate a product image or clone a voice, something happens in the background that almost nobody talks about: the actual compute work runs on servers in the United States, nearly every time. Replicate, fal.ai, OpenAI, Together, half the industry sits there. For a German tax firm or a hotelier on Mallorca, that means their prompts, images and sometimes customer data travel across the Atlantic and back. This is the blind spot of the current AI wave, and we deliberately handle it differently.

What AI inference actually is

Short and without jargon: an AI model has two phases of life. Training is the expensive, one-time part where the model learns. Inference is what happens millions of times afterwards, every time someone asks a question, generates an image or turns a voice message into text. Every chatbot sentence, every generated photo, every text-to-speech readout runs an inference.

That compute work needs specialized graphics cards that very few companies run themselves. So you rent them as an API from a provider. You send the prompt, get the result back, pay per use. Convenient, cheap, scalable. And in the vast majority of cases, that provider's server sits in Northern Virginia, not in Frankfurt.

Why the US cloud is a real GDPR problem

This isn't a gut feeling, it's the legal reality. Two things interlock here.

First, the US CLOUD Act of 2018. It obliges US companies to give US authorities access to data on request, no matter where in the world that data physically sits. A US provider with a data center in Ireland is just as affected as one in Texas. The server location alone does not solve the problem.

Second, the shaky legal basis for the data transfer itself. In 2020, the European Court of Justice struck down the then-current Privacy Shield in its Schrems II ruling. Its successor, the EU-US Data Privacy Framework of July 2023, is already under fire again, with a member of the European Parliament having filed a challenge before the EU's General Court. Anyone basing their data processing today on this single adequacy decision is building on a foundation that has already wobbled twice in recent years.

For most small businesses this stayed abstract for a long time. With AI it becomes concrete, because suddenly real content flows through these pipelines: a patient's email to the practice chatbot, a property photo sent off for editing, a guest's recorded voice message. These are exactly the kind of data the GDPR is meant to protect.

What EU-sovereign inference means

The countermovement is called sovereign AI. The core idea is simple: the compute, the models and the contracting party all sit in Europe, are subject to European law and to no CLOUD Act. Your data does not leave the European legal space.

To be honest, sovereignty here is a spectrum, not a switch. Some providers run their own hardware in European data centers, others route through European regions of larger cloud providers, and still others aggregate third-party models and put a European contract and billing layer on top. The practical gain is the same in all cases: a European point of contact, GDPR-native contracts, data residency in the EU, and a provider who understands why that is not a mere formality.

An example right on our doorstep: Socaity

When a project needs image, voice or video generation, we look for the compute in Europe first. One of the providers we work with for this happens to sit five minutes from our office, in Palma de Mallorca: Socaity.

Socaity bundles AI models for image, video, voice, 3D and text recognition behind a single API, with European routing, one contracting party and one invoice. The approach is deliberately built to be EU-sovereign, the company is based in Palma, the data processing is GDPR-native. Instead of signing up with five different US services and clarifying data processing with each one separately, you get one European gateway to many models.

For us this is more than a technical footnote. It is a concrete piece of infrastructure from our own ecosystem, built by a founder who comes from twenty years of hand-written code and treats sovereignty not as a marketing label but as an architectural decision. Exactly the kind of partner we want to work with.

What this means for your project

Concretely, it means the question of where the servers sit belongs in the planning phase, not in the privacy policy at the end. Before a chatbot or an image pipeline enters a project, we clarify where the content gets processed. For anything involving personal or sensitive data, the European option is the default, not the exception.

That rarely costs more and delivers two things at once: legal calm and an honest selling point. A hotelier who can tell guests that their requests never leave the EU has a trust argument a US pipeline will never provide. It fits the way we build anyway: the websites we ship are hosted on European servers, GDPR-compliant and without tracking cookies. The inference layer is the logical continuation of the same stance.

Honestly: the limits

To keep it fair. Europe's providers are smaller today than the US giants. The model selection is sometimes narrower, some new models appear on US platforms first, and part of the EU providers themselves pass larger catalogs through in the background. Anyone looking for the absolute biggest model buffet at the lowest price per call still often lands at a US service for now.

So the honest trade-off isn't "EU always and everywhere," but: where personal data flows, legal certainty outweighs the last cent of price difference. Where it's about purely internal, anonymous experiments, a US service can be perfectly fine. We make that distinction per project, not by dogma.

The takeaway

The AI wave has a quiet side effect: it is currently sending a great deal of real customer data from a great many small companies through American data centers, usually without anyone having asked the question. For us, that question belongs in the first planning round, not in a footnote. European inference is mature enough today to be taken as the default without giving up quality. And the fact that one of the providers for it sits a few streets away in Palma only makes the decision easier. If you want to know how we implement this in a concrete project, get in touch or take a look at how we work.