AI Under Control: A Domestic Cloud as a Secure Foundation for Czech Companies

For sectors dealing with sensitive data, data protection and regulatory compliance are key. Companies running their AI models in a cloud environment located abroad face serious risks, especially in the area of data security.

Key Risks of Operating AI In a Foreign Cloud

1. Loss of data sovereignty and foreign jurisdiction

The operation of AI models in a foreign cloud means that corporate data leaves the territory of the Czech Republic—both physically and legally. This data is then subject to the laws and government authorities of the country where the servers are located. For example, the US CLOUD Act allows local authorities to request data from cloud providers, even if it is stored in Europe. Large global players (cloud service providers) admit that they have to comply with these requirements. In other words, information from a Czech authority, hospital or law firm stored with a foreign provider may be made available to foreign government institutions without Czech approval.

What is the risk of involuntary disclosure of data for individual sectors?

• Public administration: In times of geopolitical tensions, data sovereignty is becoming an existential issue, and companies and countries are massively rethinking where they store their data. And some institutions already require key data to remain in a "sovereign" environment (i.e., in data centres under domestic jurisdiction) precisely to eliminate foreign influence.
• Legal sector: Law firms are bound by attorney-client confidentiality and the protection of client data. Storing confidential files or evidence in a foreign cloud poses a risk of breaching this confidentiality. Any unauthorized access (even if legal in a foreign country) may constitute a breach of the duty of confidentiality. Data breaches mean a loss of reputation and trust, and in the legal industry, that means a critical threat.
• Healthcare: Medical data (e.g. medical records, examination results) is extremely sensitive personal data protected by law. If a healthcare facility stores this information in a foreign cloud, it may violate medical confidentiality and GDPR if an unauthorized entity in another country gains access to it. In addition to legal sanctions, there is also a risk of losing the trust of patients.

2. Cybersecurity and the Risk of Attack

Even the largest global cloud providers are not immune to cyberattacks, vulnerabilities or configuration errors. Sensitive data entrusted to a "foreign" cloud can thus be compromised in a number of scenarios:

• Data breaches and hacking attacks: In the past, there have been massive data breaches from cloud storage. For example, misconfigured cloud buckets have made hundreds of thousands of cloud databases publicly accessible, containing up to 200 billion files, including access data, source codes, and confidential documents. Such incidents also often go undetected for a long time.
• Exploiting vulnerabilities in cloud platforms: In the past, hackers have already discovered bugs in the cloud services of the providers themselves. Even a global cloud with the best reputation can contain a weak point, the exploitation of which allows an attacker to access the data of a large number of clients at once.
• Insider threat and secondary leaks: The risk is not only a direct attack from the outside. Cloud administrators abroad, subcontractors, or even legal requirements in a given country can lead to unauthorized access to data. A leak can also occur unintentionally – for example, if an employee of the provider makes a mistake or becomes a victim of phishing.

Legal or healthcare firms become a direct target for hackers because they store valuable information.  In healthcare, ransomware attacks on hospitals are increasing, with patient data leaking. If such information is in the global cloud, the situation can be even more complicated – the common consequences of an attack (disruption of operations, endangering patients, legal penalties) are compounded by the fact that the data is stored out of direct reach of the attacked organization and the incident response may depend on an agreement with a foreign entity.

3. Regulatory Compliance and Accountability

Companies in regulated industries have a legal obligation to protect and store data in accordance with regulations. Storing them in a foreign cloud brings uncertainty as to whether they can meet the following requirements:

• GDPR and personal data protection: The transfer of personal data outside the EU is strictly restricted. In the event of an incident or unauthorized access to personal data in a foreign cloud, the company bears full responsibility before the European authorities. He does not excuse her for the fact that the data was managed by a subcontractor abroad. Penalties for data leakage or GDPR violations can be liquidating. For hospitals, this can mean fines and a ban on processing, for lawyers disciplinary proceedings, for state authorities a reputational scandal.
• Sectoral laws and standards: In healthcare, there are laws for the protection of medical documentation, in law there is an obligation of confidentiality and often also classified information (e.g. in the case of lawyers working for the state or security). The public sphere is subject to the Cyber Security Act and the requirements of state critical infrastructure, which impose strict conditions for the operation of IT systems. Many of these regulations de facto require data to be stored in secure locations under the supervision of domestic authorities. The use of a public cloud abroad can thus clash with compliance, and if there is an inspection or audit, the organization could be forced to immediately cease operations or transfer them elsewhere, at considerable cost.
• Audit and supervision: Imagine a situation where an incident occurs and an investigation needs to be carried out. With data in a foreign cloud, it can be a problem to get audit logs, access records, etc., in the necessary detail and speed. Companies also often do not have the opportunity to regularly audit the security measures of a foreign provider – they have to trust their statements and certifications. This means a certain loss of control over who handles the data and how.
• Responsibility to clients and the public: If a data leak occurs, the company cannot make an excuse for an external cloud—its clients, patients, or citizens will blame the company for mishandling the data. The consequence can be a loss of trust and damage to reputation.

Advantages of a Domestic AI Cloud (CRA) Over a Global One

For organisations that want to take advantage of artificial intelligence and the cloud, but at the same time minimize the risks described above, the AI Cloud solution from CRA is a suitable alternative. CRA operates the largest commercial cloud in the Czech Republic with specialized services for AI (GPU as a Service, Model as a Service, etc.) and emphasizes security, data sovereignty and support for local needs.

• Data remain in the Czech Republic – All data and AI model operations take place within CRA data centres. This guarantees data sovereignty – data is subject only to Czech and European laws, there is no risk of foreign jurisdiction or data transfer to foreign entities.
• Physical and cyber security at the highest level – CRA operates its own high-performance, TIER III data centres in the Czech Republic, meeting strict standards of resilience and security. CRA data centres are even part of the critical infrastructure of the state. The data is stored redundantly in two locations and the cloud architecture is designed with high availability (guaranteed uptime SLA up to 99.999%). CRA cloud also has built-in industry-leading backup tools (Veeam) and disaster recovery plans. Data security is a priority: all services undergo regular audits, meet the requirements of GDPR and ISO standards. It is also important that CRA does not use your data for its own purposes in any way—the content of your databases and models is not analysed or used to train third-party algorithms.
• Local technical support and contractual guarantees – Unlike global platforms, CRA offers 24/7 support in the Czech language. In the event of a problem, you have a local team of specialists at your disposal who react immediately. Communication in Czech and knowledge of the local environment makes it easier to deal with incidents and implement security measures. At the same time, CRA provides clearly defined contractual terms and guarantees (SLAs) for performance and availability, e.g. guaranteed CPU/disk performance, GPU capacity, etc., with financial penalties for non-compliance. For customers from the public sector or regulated industries, CRA can adapt the contract to comply with all legal obligations (including surveillance audits, access logging, etc.).
• Regulatory Compliance and Auditability – Choosing a home cloud will make it easier for companies to work with regulations. They do not have to deal with the complications surrounding cross-border data transfer, the so-called Cross-Border Data Transfer. Standard contractual clauses or GDPR exceptions. Health data can remain in the Czech Republic, which is in line with the recommendations of the Office for Personal Data Protection and European regulators for sensitive data. CRA cloud also meets the requirements of the Cybersecurity Act for critical information infrastructure. For internal or external audits, the client can obtain demonstrable guarantees from CRA that data is stored only in the Czech Republic and how it is handled – including access logs and data management. This auditability helps companies in legal security defense (e.g. against supervisory authorities or certifications).
• Powerful and flexible AI infrastructure – CRA AI Cloud offers technological benefits comparable to or better than the big players, but under full local control. High-performance GPU servers are available to train and run demanding AI models as a service. Companies can scale their performance as needed, without having to invest in their own hardware. The services are flexible – from renting GPU capacity, to hosting your own AI models, to using pre-trained models as a service. Compatibility with OpenAI API standards facilitates the eventual transition of applications from global AI services to the CRA cloud, a company can relatively easily migrate its AI workflow from the public cloud to CRA without having to rewrite software. This gives them sovereignty and security, but they don't lose the benefits of the cloud such as flexibility and scalability.
• Predictable costs and financial benefits – Last but not least, economic aspects also play a role. CRA cloud has a transparent pricing policy – it doesn't charge hidden fees for transferring data in/out of the cloud and doesn't require long-term commitments of minimal spending. This allows companies to better plan costs and avoid being surprised by additional invoices. In addition, thanks to the Virtix self-service portal, resources and costs can be optimized in real time – IT managers have an immediate overview of what is being paid for and can adjust capacities according to current needs. For the government sector and healthcare, where budgets are tight, predictability and cost control is another benefit of the on-premises cloud.

CRA is a well-known domestic player with a stable background and for many institutions it is a guarantee of trust. In addition, it can also offer an individual approach, e.g. a private turnkey cloud solution directly at the customer's location (CRA offers the Business Cloud InHouse service  for clients with exceptional requirements for data security and location).

Companies should carefully consider to whom they entrust their "digital family silver.” If data security and legal certainty are a priority for them, the AI cloud makes clear sense in the Czech environment. It will allow you to use the full potential of artificial intelligence without having to worry about the risks associated with foreign hosting. For many organizations, the home cloud can be the key to successful and secure digitalization in the era of AI.