Judge the chain of companies that touches your prompts, not the logo on the contract. One US-controlled party in that chain can bring the data it holds within reach of a US order, wherever the servers stand.
Which LLM API providers are European-owned, and how do I check that they are outside the CLOUD Act? You ask because you approve the tools your product sends personal data to. This guide gives you the test and runs it on three invented providers. It gives no list of names, because a name tells you nothing about the chain behind it.
We are Lyceum, a sovereign European AI inference provider for open-source models. Our serverless models run in Paris and Finland. Serverless means you call a model through our API and pay per token, without running servers yourself.
Who does the US CLOUD Act reach?
The CLOUD Act reaches any provider of a computing service that is subject to US jurisdiction. The Clarifying Lawful Overseas Use of Data Act was enacted in March 2018. It added one sentence to an older US law, the Stored Communications Act.
That sentence says a provider must disclose data in its "possession, custody, or control". It must do so "regardless of whether such communication, record, or other information is located within or outside of the United States".
The law covers providers of a "remote computing service". US law defines that as computer storage or processing services offered to the public.
The US Department of Justice explains the reach in its April 2019 white paper. Providers subject to US jurisdiction must disclose the data an order asks for, regardless of where the company stores it.
The same paper sets the limit that matters for you. US jurisdiction "is not limited to U.S. corporations, U.S. headquartered companies, or companies owned by U.S. persons". It is not unlimited either. A court looks at a company's contacts with the US. The more a company directs its business into the US, the more likely the court finds jurisdiction.
Why EU hosting alone is not enough
EU hosting answers where the servers stand. The CLOUD Act asks who holds or controls the data on them, and a data centre in Paris answers only the first question.
The EDPB and the EDPS, the EU's data protection authorities, said so in a joint response on 12 July 2019. The Act lets US authorities require disclosure from providers under US jurisdiction, "irrespective of where the data is stored".
EU law pushes back on such orders. Article 48 of the GDPR (the EU's data protection regulation) sets the rule. A foreign court order is only recognised through an international agreement, such as a mutual legal assistance treaty. That is an agreement between governments to share evidence in criminal cases. Without one, the authorities say, providers subject to EU law cannot base a disclosure to the US on such a request.
A provider bound by both US and EU law can face two rules that contradict each other. That conflict is the provider's problem, and it gives you no guarantee about your data. For the EU regions of US clouds, see is your AWS EU region actually GDPR-safe?.
What makes an LLM API provider EU-owned and operated?
An LLM API provider is EU-owned and operated when every company in the path of your prompts is European and answers to no US parent. Ownership is who owns the shares. Operation is who runs the servers and who can reach the data on them.
The path has more parties than the logo. The example below uses four: the contracting company, its parent, the GPU host that runs the model and a payment provider. Three of them can reach your prompts or control a company that can. The payment provider never sees a prompt, so it cannot hand one over. A subcontractor that processes data for the provider is called a subprocessor.
Control can sit with a parent even when the subsidiary is European. The Justice Department says whether a company controls data held by a subsidiary is a fact-dependent question, "regardless of corporate structure".
How do you verify ownership, parent company and sub-processors?
You verify ownership by mapping each provider's chain and marking every US link. Take a hypothetical shortlist of three providers, A, B and C. They are invented, not real companies, and each has the four parties above.
| Provider (hypothetical) | Contracting company | Parent company | GPU host | Payment provider | US links | US links that can reach prompts |
|---|---|---|---|---|---|---|
| A | EU | US | EU | US | 2 | 1 (parent) |
| B | EU | EU | US | US | 2 | 1 (GPU host) |
| C | EU | EU | EU | US | 1 | 0 |
All three pass a check that only asks whether the contracting company is in the EU. Only C passes the prompt-path test. A fails through its parent, B through its GPU host. The US payment providers do not count, because they never see a prompt.
The example treats each provider's ownership as known. That makes the test look easier than it is. In practice, you read ownership from the company registry entry, the provider's legal page and its subprocessor list. The example also does not show three things. It gives no legal finding on jurisdiction, and it ignores the data your own systems hold and where support staff sit.
Then ask what the chain holds. The Act reaches records a provider possesses or controls, so ask each provider what record one request leaves behind.
Here are our own answers, as a worked case. Our legal page names the companies whose staff run the platform: Lyceum Technology Germany GmbH in Berlin and Lyceum Switzerland GmbH in Zurich. Because one is Swiss, we call ourselves European-owned, not EU-owned. Our staff cannot see prompts and responses.
Our subprocessors sit mainly in the EU and the European Economic Area (EEA). Anything outside it is covered by GDPR safeguards such as standard contractual clauses, the EU's model contract terms for transfers. Each subprocessor sees only what its part needs, and a payment provider never sees a prompt. Which subprocessors apply depends on the service you choose.
Our gateway is the server that checks your API key before a request reaches a model. It passes your prompt through in memory and never logs it or writes it to a database. The only record a request leaves is a usage record: your organisation and user, the model, token counts and the time. We don't keep prompts or outputs, and we never use them for training. None of this is a legal finding about the CLOUD Act. It is the input for your own.
What about German enterprises with stricter requirements?
A German enterprise with stricter rules may add two requirements to the ownership check: a named processing location and a certification. Ask for both in writing, in the contract or its annexes, not on a web page. Our guide to a sovereign LLM API for German enterprises covers the German contract terms.
Our answers: serverless models run in Paris and Finland. For dedicated endpoints, which reserve GPUs for you, and for GPU virtual machines, the location is agreed per contract. Our legal page shows an ISO 27001 audit in progress, not a certificate. ISO 27001 is the international standard for managing information security.
Questions to put in the procurement checklist
Put the chain into your procurement checklist as five questions, each needing a written answer.
- Which company do we sign with, and who owns it, up to the top parent?
- Which subprocessors can reach our prompt text, and where is each one based?
- What record does one request leave behind, and for how long is it kept?
- How do you tell us about a new subprocessor, and how long do we have to object?
- Which of these answers sit in the contract, and which only on a web page?
Our answer to question 4 is on our legal page. We tell you before we add or replace a subprocessor, and you can object within 10 business days. The window is short, so set a reminder. For a notice on Monday 2 November 2026 (a hypothetical date), it closes as below.
Notice received: Monday 2 November 2026
+ 10 business days: 3, 4, 5, 6, 9, 10, 11, 12, 13, 16 November
Last day to object: Monday 16 November 2026 (no public holidays counted)The same page holds the DPA (data processing agreement), the TOMs (technical and organisational measures) and the subprocessor list. Our DPA is Annex 1 of our terms. Under it, we are the processor, the party that handles personal data on your behalf. For vetting a provider's "sovereign" label as a whole, see how to vet a sovereign EU cloud claim.
Approve a provider when every party that can reach your prompts is European and the answers are in writing. If one link is a US company, decide whether your data may go there before you send it. To check one deployment and its data requirements, talk to our engineers.
Frequently asked questions
Does an EU data centre keep my data out of reach of US orders?
Not on its own. A US order goes to a company, not to a building, so what counts is who holds or controls the data in that data centre.
Is a US company's EU subsidiary covered by the CLOUD Act?
It can be. The US Justice Department treats control over a subsidiary's data as a question of fact, whatever the corporate structure. Ask who controls the subsidiary's systems.
Can I rule out one of your subprocessors?
Yes. Which subprocessors apply depends on the service you choose, so your choice of service can rule one out. You can also object to a new subprocessor within 10 business days of our notice.