"Microsoft CEO Satya Nadella wants Europe to rethink its stance on data sovereignty just as AI systems become more deeply embedded across global business. His message: Europe may be obsessing over "where" data lives, while missing the more consequential question of "who ultimately benefits" from the intelligence derived from it. "I think sovereignty requires real thought on what it is. Control of destiny means that your ability to produce something that is unique is preserved," Nadella told BlackRock CEO Larry Fink during a fireside chat at the sidelines of the annual meet in Davos, organized by the World Economic Forum."
"Instead, the CEO framed the real risk as unintentional "leakage" of intelligence - the insights, patterns, and institutional knowledge derived from enterprise data - into third-party AI models or external entities. In Nadella's view, such leakage can occur even under the strictest data residency regimes. He implied that Europe's regulatory emphasis may be misaligned with the realities of AI-driven value creation."
Europe's emphasis on data localization risks overlooking who benefits from intelligence derived from data. True sovereignty centers on preserving control of destiny and the ability to produce unique outcomes. The main risk is unintentional "leakage" of insights, patterns, and institutional knowledge into third-party AI models, which can occur even under strict residency regimes. Protecting tacit knowledge and controlling downstream reuse of intelligence better preserves global competitiveness than focusing solely on storage compliance. Shifting focus could prevent strategic insulation and maintain competitiveness.
Read at Computerworld
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