Five hidden Risks of using the wrong AI for Business
- Matthias Zwingli
- 6 days ago
- 3 min read
What’s going on here?
For trust firms and businesses dealing with sensitive data, the choice of AI provider is more than just a tech decision, it’s a matter of security, compliance, and trust. As AI becomes a central tool in everything from customer service to operations, many companies are realizing they can’t afford to overlook where their AI systems are hosted and who controls the data.
In this post, we’ll walk you through five critical risks of using non-Swiss AI or EU providers and why those risks matter for your company.
What does this mean for your business?
AI providers, from giants like Microsoft and OpenAI to emerging players, offer incredible tools that can automate processes, drive efficiencies, and help businesses stay competitive. But the data that flows through these systems is just as important as the AI itself.
For businesses operating in sectors like finance, health care, legal services, or any other industry that handles sensitive client information, choosing the wrong AI provider can expose you to major risks, including data leaks, regulatory fines, and a loss of trust from clients.
The top 5 risks explained
1. Host Location Matters
When your AI provider hosts data in regions with weak data protection laws (like China), your sensitive business information could be at risk. In 2025, DeepSeek, the Chinese AI company, leaked over 1 million conversations records.
This is especially critical for industries like finance, law, or healthcare, where data privacy is not just a matter of risk, it’s a legal requirement.
2. Unwanted Model Retraining
When you use AI like ChatGPT, your inputs might be used to retrain the model. That means confidential business insights you share could end up influencing the AI’s knowledge base. OpenAI, for example, clearly states that user data helps improve models, which means your business data might be used to improve the AI’s performance for other clients, possibly exposing your competitive edge.
This is an issue especially for companies working with proprietary data like product designs, financial data, or client strategies.
3. Data Breach Vulnerabilities
Even the most trusted AI providers aren’t immune to data breaches. Take the example of Samsung, which banned the use of ChatGPT in 2023 after employees uploaded sensitive internal code. The risk? Those files were stored by OpenAI, leaving them vulnerable to breaches.
For any business dealing with confidential data, this kind of breach could lead to financial penalties, a tarnished reputation, and a loss of client trust.
4. Permanent Data Storage
When your company uses AI, it's not just about temporary data processing, some AI providers store user interactions indefinitely. Microsoft’s Recall feature on Copilot, for instance, takes screenshots of your desktop and stores them for AI-assisted analysis, raising concerns about long-term surveillance and privacy violations.
For companies bound by regulations like GDPR or financial firms under strict compliance rules, this could be a violation of privacy laws and expose you to significant fines.
5. Data in Switzerland, Access from the U.S.
Storing your data in Switzerland is a way to ensure maximum data sovereignty. But if your AI provider is based in the U.S., data stored in Switzerland can still be accessed by U.S. authorities due to laws like the CLOUD Act. This is especially risky for businesses in regulated industries that require complete control over who can access their data.
For companies that need to ensure absolute privacy and compliance with Swiss law, only a truly Swiss-hosted AI provider can guarantee that no foreign government can access your business data.
Why should I care?
If you’re in a highly regulated industry, these risks are more than just “hypotheticals",they could lead to loss of client trust, regulatory fines, or data loss.
Choosing the right AI provider isn’t just about functionality. It’s about ensuring your client data is safe, your business complies with local laws, and your company’s reputation remains intact.
The bigger picture: Trust, transparency, and compliance.
The last few days have shown us just how vulnerable Europe can be when it comes to its digital dependencies. High reliance on IT infrastructure from the USA or China leaves companies exposed to geopolitical shifts, legal uncertainty, and potential disruptions.
That’s why now is the time to rethink our digital infrastructure and push for a sovereign, independent European IT architecture. One that strengthens resilience, autonomy, and long-term stability.
As AI becomes an essential tool for companies, especially in highly regulated sectors like finance, law, and healthcare, the stakes are higher than ever. Choosing an AI provider becomes a strategic move to ensure compliance, security, and data sovereignty.
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