The "Sovereignty Gap": Why Microsoft Copilot Isn't Enough for German SMEs

Microsoft Copilot is here. The colorful button in Word and Excel promises magical productivity. But for German executives who are liable for the security of construction plans and balance sheets, a dangerous gap opens up: The "Sovereignty Gap".

It's the crucial question of German IT in 2025: "Can we just turn on Copilot?"

Microsoft's answer is usually: "Yes, we now have the EU Data Boundary. Your data stays in Europe."

Data protection experts answer: "It's complicated."

At Syntriq, we say: For planning the Christmas party, Copilot is fantastic. For your trade secrets, it's a risk you cannot ignore.

The Illusion of Geographic Security

Microsoft has invested billions to build servers in Europe. The promise of the "EU Data Boundary" sounds reassuring: Your data is physically processed on hard drives in Frankfurt, Dublin, or Amsterdam.

But physical sovereignty is not the same as legal sovereignty.

This is where the US CLOUD Act comes into play. This US law obliges American IT corporations (like Microsoft, Amazon, Google) to grant US authorities access to data – no matter where in the world those servers are located.

A judge in New York can force Microsoft to hand over data stored on a server in Frankfurt. Microsoft must choose: Violate US law or violate GDPR. In practice, the parent company's home jurisdiction almost always wins.

This is the Sovereignty Gap: The gap between where your data is located (Germany) and who has access rights (USA).

The "Black Box" Problem: When AI Knows Too Much

Besides external access, there's an internal risk that's often underestimated: While Copilot respects permissions, companies often lack the necessary "data hygiene".

A classic scenario:

Over the years, millions of documents have accumulated on your file servers and SharePoint. Many of them rely on "security by obscurity" – they're not strictly locked, just hard to find. Nobody searches the folder \\Archive\Board\2019\Drafts for the file Salary_Planning.xlsx.

But Copilot "sees" everything.

When an intern now asks: "What's the salary structure in marketing?", Copilot searches through all documents the intern theoretically has read access to in milliseconds – including those they would never have found manually – and helpfully summarizes the sensitive data.

Without a years-long, painful cleanup campaign of your permissions structure (Identity Access Management), Copilot becomes internal WikiLeaks.

The Danger of Industrial Espionage

Germany is the land of "Hidden Champions". Your capital isn't user data, but engineering excellence, chemical formulas, and manufacturing processes.

When you upload these "crown jewels" to a US cloud, you trust that they won't be misused for competitive purposes. But in a world of increasing geopolitical tensions, "trust" is not a strategy.

A "local-first" strategy is.

TheroAI: Closing the Gap

We built TheroAI to fill the Sovereignty Gap. Our approach differs fundamentally from US hyperscalers:

1. Legal Immunity: Since Syntriq is a German company and you run our software on your own infrastructure (or German clouds like STACKIT), we are not subject to the US CLOUD Act. No US court can force the release of your data.

2. Granular Control: TheroAI indexes your data, but you determine exactly which "knowledge silos" are available to which user groups (e.g., trainees vs. management).

3. Transparency: We're not a black box. You can (thanks to open-source components and Docker architecture) see exactly which data flows where. There's no "phone home" channel to the USA.

Checklist: Which Data Goes Where?

We're not advocating for complete cloud avoidance. We're advocating for hybrid intelligence. Use the right tool for the right data class.

Conclusion: Microsoft Copilot is a powerful tool for the mainstream. But for the core of your value creation, you need more than just a promise. You need technical sovereignty.

Take the Security Check

Are you unsure whether your current IT landscape is ready for AI? Or whether your permissions structure is "Copilot-proof"?

Schedule a non-binding Architecture Review with our experts to identify your "Sovereignty Gap".