Flex Routing (EU and EFTA) for Copilot LLM Data Processing

Microsoft has quietly enabled "flex routing" for Microsoft 365 Copilot across the EU and EFTA, allowing AI data processing to happen outside European borders when regional servers hit capacity. This is a direct challenge to the EU Data Boundary commitments that European enterprise customers relied on when choosing Microsoft's AI tools, and it is already active by default for new tenants created after March 25, 2026.

This story matters because it signals a shift in how AI agents are being adopted across the industry. We are tracking this development closely and will report on follow-up impacts as they emerge.

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