Microsoft Expands Data Sovereignty for 365 Copilot: In-Country Processing to 15 Nations

Microsoft has announced a major step in its AI infrastructure strategy with the rollout of in-country data processing for its productivity assistant Microsoft 365 Copilot.

Starting by the end of 2025, the service will allow customers in four countries—Australia, the United Kingdom, India and Japan—to have Copilot interactions processed locally.

The programme is slated to expand to a total of 15 countries by 2026, including Canada, Germany, Italy, Malaysia, Poland, South Africa, Spain, Sweden, Switzerland, the United Arab Emirates and the United States.

Microsoft says this move enables enterprises and government agencies to retain greater control over how and where AI-powered prompts and responses are processed—a key advantage in highly regulated industries.

The company already offers in-country data residency to customers in 27 nations, and this announcement extends the principle to data processing as well.

"With in-country processing, Copilot interactions are processed, under normal operations, in data centers located within a nation’s borders, giving customers greater control over their data," Microsoft said.

For enterprises in India and other targeted markets, the update offers potential benefits in terms of compliance with local regulations, reduced latency and better performance of AI-driven productivity tools.