The Norwegian Tax Administration is among Norway's most data-intensive public sector entities, and the agency has high ambitions for the use of artificial intelligence. But according to Digi.no, the agency is encountering a concrete and frustrating obstacle: Microsoft Azure and the Databricks platform are not prioritizing their Norwegian region when new AI services are rolled out.
Norwegian region lags behind
Microsoft has two Azure regions in Norway — Norway East outside Oslo and Norway West near Stavanger. Norway East is the primary region and has offered so-called Availability Zones since September 2021, which provide higher operational reliability by distributing infrastructure across at least three separate data centers.
Nevertheless, Norway East is not on par with the large European regions regarding the availability of AI services. New models and platforms are typically launched in the North and West Europe regions first, and then gradually rolled out to smaller regions like Norway — if they arrive there at all.
This is confirmed by Microsoft's own documentation: Azure OpenAI services, for example, were made available in Norway East for selected models from August 2025, but the offering is still limited compared to the central European regions.
Considering moving out
The consequence of the limited service offering is that the Norwegian Tax Administration, according to Digi.no, is now considering moving parts of its IT solutions out of the Norwegian Azure region. This would potentially mean that data and processing are moved to European data centers outside Norway — a choice that raises questions about data control, privacy, and national digital sovereignty.
This is not a decision taken lightly by an agency that handles extremely sensitive information about Norwegian citizens and businesses. Nevertheless, access to modern AI tools is apparently weighed more heavily than the benefits of local data storage.
A structural problem for the public sector
The problem highlighted by the Norwegian Tax Administration is hardly unique to them. A number of Norwegian public sector entities operate under requirements for data storage in Norway or within the EEA, and are thus dependent on cloud providers prioritizing Norwegian infrastructure.
Microsoft has on several occasions emphasized that they are “the only public cloud provider offering services from within Norway,” as Christopher Frenning, Data Center Lead at Microsoft Norway, stated in connection with the launch of Availability Zones in 2021. But the availability of the data center itself is not the same as the availability of the latest AI services.
It is worth noting that Microsoft's own documentation emphasizes that even though Azure OpenAI services can be configured to keep data within the EU/EEA area, it is not guaranteed that data will remain strictly within Norwegian borders for all services — with the exception of deployments directly in Norway East.
Databricks also in the picture
In addition to Microsoft, the Norwegian Tax Administration points to Databricks as a provider that does not sufficiently prioritize the Norwegian region. Databricks is a central platform for large-scale data analysis and machine learning, and is used by many large enterprises as a foundation for AI work. Limited availability of the platform's latest features in the Norwegian region further exacerbates the challenge.
Collectively, this paints a picture that the Norwegian public sector's AI ambitions risk suffering — not due to a lack of will, competence, or budgets, but because global technology providers simply do not prioritize the Norwegian market quickly enough.
The Norwegian public sector is forced to choose between keeping data in Norway and adopting the latest AI technology.
What will it take?
For the situation to improve, both political pressure and commercial incentives towards the major cloud providers are likely required. Norway is a small market in a global context, and providers naturally prioritize regions with the greatest demand.
A possible way forward could be for Norwegian authorities to coordinate purchasing pressure through, for example, the Norwegian Digitalisation Agency, or for clearer requirements to be set in public procurement that providers must offer equivalent service access in the Norwegian region. Until then, Norwegian agencies risk operating with one hand tied behind their back in the AI race.