Workload placement by sensitivity

Respondents place different AI workloads in different environments:

• Inference for internal knowledge assistants:
• VPC: 51%
• Hybrid: 28%
• On-prem: 13%
• Sovereign cloud: 8%
• Fine-tuning on proprietary data:
• Hybrid: 36%
• On-prem: 27%
• VPC: 29%
• Sovereign cloud: 8%

Benchmark takeaway: Fine-tuning skews more on-prem/hybrid due to data gravity, GPU scheduling, and tighter control of training artifacts.

2) Data Sovereignty Controls: What’s Covered vs What’s Forgotten

Chart (described): A “coverage heatmap” with rows for data types (raw docs, embeddings, prompts/outputs, telemetry, backups) and columns for controls (residency, encryption, retention, access logging). The darkest gaps appear in embeddings and logs.

Residency enforcement by data type (benchmark)

• Raw documents / source records: 57%
• Derived datasets (cleaned/normalized): 49%
• Vector embeddings: 38%
• Prompts & outputs: 33%
• Model telemetry (latency/metrics): 46%
• Backups/snapshots: 44%

Why embeddings matter: Embeddings can leak sensitive information through inversion or membership inference in certain scenarios, and they often replicate regulated data at scale. Treat embeddings as regulated data unless proven otherwise.

Jurisdiction and subcontractor risk

• 62% require residency guarantees from primary vendors.
• Only 29% require subprocessor residency attestations (e.g., logging providers, analytics, support tooling).

Benchmark threshold: If you cannot list subprocessors and their data locations for AI telemetry and support tickets, your sovereignty posture is incomplete.

3) Security & Governance: Controls Most Associated with Lower Incident Rates

We asked organizations whether they experienced an “AI-related security or compliance incident” in the last 12 months (e.g., sensitive data exposure via prompts, misconfigured access to vector DB, policy violation of transfer rules).

• Reported incident rate (overall): 21%
• Mature programs: 12%
• Emerging programs: 27%

Controls with the strongest correlation (observed)

Organizations with the following controls reported materially lower incident rates:

1) Centralized prompt/output logging with access controls

• Adoption: 39%
• Incident rate among adopters: 13% vs 26% non-adopters

2) CMK/HSM for vector stores and document stores

• Adoption: 41%
• Incident rate among adopters: 14% vs 26% non-adopters

3) Pre-production prompt injection testing + guardrails

• Adoption: 34%
• Incident rate among adopters: 11% vs 25% non-adopters

Note: Correlation is not causation. However, the consistency across sectors suggests these controls are practical “first bets.”

Time-to-production vs governance maturity

Chart (described): A box-and-whisker plot comparing TTP for mature vs emerging programs. Mature programs have a lower median and tighter variance.

• Mature: median 9 weeks, IQR 6–13
• Emerging: median 16 weeks, IQR 10–24

Interpretation: Mature programs move faster because they predefine review paths (DPIA templates, model risk checklists, standard contract clauses), reducing rework.

Industry Comparison: How These Benchmarks Stack Up to Public Signals

Because “private AI” is defined inconsistently across vendor and analyst reports, direct comparisons require caution. Still, multiple public frameworks and regulatory trends support the direction of our findings:

• GDPR (EU Regulation 2016/679) continues to shape cross-border data transfer decisions, particularly for personal data and sensitive categories. This aligns with our finding that residency/jurisdiction is the #1 blocker (52%).
• NIST AI RMF 1.0 (2023) emphasizes governance, mapping, measurement, and management. Our maturity definition mirrors this: programs that operationalize governance show lower incident rates (12%) and faster TTP (9 weeks).
• EU AI Act (adopted 2024; phased) pushes organizations toward auditable AI lifecycle controls. The benchmark gaps we observe—especially around logs and derived artifacts—are precisely where audit readiness often fails.

Practical comparison point: Traditional cloud security benchmarks (e.g., CIS Controls adoption patterns) often show encryption and IAM adoption outpacing monitoring and testing. Our data mirrors that: encryption (41% CMK) is ahead of testing (34%) and red-teaming (28%).

Actionable Insights: How to Use These Benchmarks

1) Set a “Minimum Viable Sovereignty” target (90-day plan)

Use these thresholds as internal targets for the next quarter:

• Residency coverage: raise embeddings + logs residency enforcement to ≥60% of applicable workloads (from current 38% and 33% benchmarks).
• Key control: implement CMK/HSM for vector DB + document store (target ≥70% of private AI workloads).
• Logging: centralize prompt/output logs with least-privilege access (target ≥75% of production apps).

2) Standardize your architecture patterns to reduce review time

Teams with faster TTP reused approved patterns. Create 2–3 “golden paths”:

• VPC Inference Pattern: private endpoints, CMK, centralized logging, DLP scanning, egress controls.
• Hybrid Fine-Tune Pattern: on-prem data prep + private cloud training, artifact registry, retention policy, lineage.
• Sovereign Cloud Pattern (where needed): residency attestations, subprocessor inventory, support access controls.

3) Treat embeddings and prompts as regulated data by default

Benchmark gap: embeddings residency enforcement is 19 points lower than raw documents (38% vs 57%). Close it by:

• Classifying embeddings at the same sensitivity as source data unless proven otherwise.
• Applying retention limits (e.g., 30/90/180 days by class).
• Encrypting embeddings with CMK and restricting export.

4) Make governance a throughput system, not a gate

Mature programs are 7 weeks faster at median TTP. The operational recipe:

• Pre-approved DPIA/PIA templates for common use cases (RAG assistants, summarization, ticket triage).
• A model risk checklist aligned to NIST AI RMF (data, privacy, security, explainability, monitoring).
• Contract clauses that explicitly cover training use, log retention, subprocessors, and residency.

5) Measure what matters: three KPIs executives understand

Adopt KPIs that connect sovereignty to outcomes:

• Residency coverage rate (by artifact type: raw, embeddings, logs, backups)
• Incident rate per 10 production AI apps (12-month rolling)
• Median time-to-production (weeks) by use case class

Related Reading

• CUI-Safe CRM: The Complete Guide for Defense Contractors

Conclusion: The 2026 Reference Benchmarks for Private AI

Private AI is increasingly a sovereignty strategy: professionals are choosing VPC and hybrid models not just for control, but for auditability and jurisdictional certainty. Our benchmarks show three clear patterns:

• Hybrid and VPC-first deployments dominate (46% VPC, 29% hybrid), while pure on-prem is 15%.
• Embeddings and logs are the biggest sovereignty gaps (38% and 33% residency enforcement).
• Governance maturity improves speed and reduces incidents (9-week median TTP and 12% incident rate for mature programs).

If you’re building your 2026 roadmap, use these numbers as internal baselines—then target the gaps that most organizations haven’t closed yet.

CTA: If you want a tailored benchmark cut (by region, sector, or company size) and a prioritized 90‑day private AI sovereignty plan, cabrillo_club can help you map controls to architecture and procurement requirements.