Microsoft routes European Copilot data outside the EU to fix performance issues
Microsoft is changing how it processes Copilot requests for European users. Starting 17 April 2026, the company will automatically route queries outside the European Union during periods of high demand. This new system sends prompts to servers in the United States, Canada or Australia to prevent slowdowns. The feature is called flex routing. Microsoft states that all data remains encrypted and that this maintains existing residency commitments. However, pseudonymised operational data will leave the region. Administrators can disable this feature in the Microsoft 365 Admin Center. It will be activated by default for all existing European tenants.
European companies previously bought Copilot licences under the strict assumption that their corporate data would never leave the regional data boundary. This guarantee was the only reason many compliance teams approved the software in the first place. Users accepted occasional lag and timeouts as the necessary price for keeping sensitive prompts within local borders. Microsoft is now prioritising speed over strict geographical containment. By making global routing the default setting, they are forcing companies to actively opt out to maintain local processing. This creates an immediate headache for governance teams who must now choose between a faster AI tool and their internal compliance rules.
Analysis
IT teams are already nervous about Copilot data governance, and this silent update is exactly the kind of trap that gets licences revoked. Do not wait for compliance to find out about this change from an external audit. Tell your admin to open the Microsoft 365 Admin Center today and explicitly decide if a speed boost is worth the regulatory headache.
Source note
Pulse published by Collab365 Spaces. Cite as "Microsoft routes European Copilot data outside the EU to fix performance issues", Collab365 Spaces.