Issue Data regulation and geopolitical risk now shape where shared services can operate

Summary

This issue concerns the regulatory and geopolitical constraints on global business services. McKinsey observes that AI-native centers depend on data moving across borders, which exposes companies to data privacy law, local AI rules, and geopolitical risk. These factors now drive decisions about the physical and legal footprint of such centers. They determine where data is kept, which jurisdiction governs each center, and what is needed to stay resilient amid global uncertainty. McKinsey recommends a diversified footprint that weighs cost, capability, regulation, cybersecurity, and geopolitical exposure together.