Imagine this:
You’re excited to deploy a cutting-edge AI-powered support solution. It promises instant responses, seamless automation, and better CSAT scores. But there’s a catch: your customers’ data is silently being shipped to a data center in another country—outside of your compliance zone.
Suddenly, that fancy AI tool feels like a ticking legal time bomb.
This isn’t some worst-case scenario. It’s happening every day with AI tools that rely on third-party APIs, including OpenAI’s API-based services.
At Knots, we do things differently. Instead of relying on external AI models, we let you, if you want to, bring your own AI—hosted on Microsoft Azure—so you stay in full control of your AI data privacy and compliance.
The Compliance Conundrum
Many AI-powered tools, including those used for customer support automation, process data using third-party servers—often located in the U.S. or other jurisdictions that don’t align with your organization’s compliance requirements.
For companies bound by regulations like GDPR (Europe), CCPA (California), or industry-specific data laws, this is a major problem. If data is sent to a region with different privacy laws, you might be in violation without even realizing it.
🔍 Are you looking for a more general introduction into GDPR and Zendesk? Please check out this guide.
One well-known example? HubSpot’s AI tools rely on OpenAI APIs, which means customer data may be processed externally. If HubSpot had implemented an approach like Knots.io’s, allowing businesses to use their own models, the compliance risk would be significantly lower.
So the key question remains: Is OpenAI GDPR compliant?
The answer is complex. OpenAI offers a Data Processing Addendum (DPA) and claims to support GDPR compliance, but its reliance on U.S.-based processing raises concerns. In December 2024, Italy’s privacy watchdog fined OpenAI €15 million for processing personal data without a legal basis and lacking transparency. Additionally, the European Data Protection Board (EDPB) launched a task force to investigate ChatGPT’s compliance with GDPR, focusing on lawful data processing and user control over data.
While OpenAI has made improvements, such as allowing users to manage their data preferences, its compliance with strict GDPR requirements remains uncertain. Organizations using OpenAI should conduct their own risk assessments and consider alternatives like Knots’ self-hosted AI models for full GDPR compliance.
Knots’ Solution: Your AI, your data, your control
Instead of relying on external AI APIs, Knots lets you deploy your own AI models in Microsoft Azure, ensuring:
- Data stays within your selected region to meet compliance requirements
- No external third-party AI processing—your AI is truly yours
- Full control over data security & customization
- AI GDPR compliance built into your operations by default
We’ve outlined more AI data security concerns and solutions in more detail here.
Why Azure?
Microsoft’s Azure Cloud is the gold standard for businesses that need secure, region-specific AI deployment. Unlike third-party API solutions that process data externally, Azure allows businesses to keep all AI processing within a controlled environment.
Key advantages include:
✅ Data Residency & Compliance – choose your data center region (Microsoft Data Residency)
✅ Enterprise-Grade Security – built-in compliance certifications for GDPR, HIPAA, and ISO 27001
✅ AI Customization & Scalability – train, fine-tune, and deploy models that match your specific use case
Comparison: Third-party AI vs. Knots + Azure
| Feature | Third-Party AI | Knots + Azure |
|---|---|---|
| Data Ownership | Data processed externally | Fully owned & controlled |
| Compliance Risk | High (US-based processing) | Low (Region-specific hosting) |
| Customization | Limited | Full control |
| Data Residency | Uncertain | Fully in your selected region |
This means no surprises, no data transfers you didn’t approve, and full transparency over how your AI operates.
Balancing efficiency and compliance
While third-party AI services offer convenience, they often come with hidden risks. Knots’ self-hosted AI model approach bridges the gap, ensuring that businesses can:
- Enjoy AI-driven automation
- Maintain full control over data security
- Stay 100% compliant with local and industry-specific regulations
And best of all? You don’t have to figure it out alone.
What’s next?
✅ Explore how AI and compliance work together: Learn more
✅ Have questions? Let’s figure it out together: Talk to us
Final thoughts
AI tools are amazing, until you realize your customer data is going on a world tour without your permission. With Knots.io, that doesn’t happen. You get all the benefits of AI automation without the compliance headaches.
Not sure if your AI setup is compliant? Let’s talk! We’ll help you figure it out.
