In a regulated environment "we do not store your data" is a policy. "The process makes no outbound connections" is an observation, and only one of them survives an audit.
Plenty of teams would prefer a private tool and settle for a policy. Some cannot. If your database holds regulated health, financial or personal data, the question a reviewer asks is not whether the vendor promises to discard your schema — it is whether the schema can leave at all. Those are different claims, and only the second is testable.
Every step of answering a question has to be local, or the tool is online with a local cache.
You do not have to take this on trust. Configure a local model, cut the machine off the internet, and ask it a question. It answers. That is a test a security reviewer can run in five minutes, and it is a materially stronger artefact than any data-processing addendum — which is exactly why the architecture is arranged so the test passes.
Nothing here forces you offline permanently. Hosted models are opt-in per connection, so an air-gapped production database and an internet-connected staging one can be configured differently and both be right. What matters is that the default is the private one, because a privacy setting you have to find and switch on is one most people never do.
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