MicrosoftDocs · dmwmsft · Dec 9, 2025
diff --git a/microsoft-365/enterprise/advanced-data-residency.md b/microsoft-365/enterprise/advanced-data-residency.md
@@ -26,10 +26,31 @@ ms.custom: seo-marvel-apr2020
 
 The _Microsoft 365 Advanced Data Residency add-on_ (_ADR_) provides eligible customers with expanded coverage of Microsoft 365 services and Customer Data, committed data residency for local country/region datacenter regions, and prioritized _Tenant_ migration services. With _Advanced Data Residency_, enterprise customers can best address their data residency compliance and _Tenant_ location requirements.
 
-The following services are included in _ADR_. For more information, see:
+### LRDR Framework and Two-Tier Commitment Model
 
+_Advanced Data Residency_ is part of Microsoft's **Local Region Data Residency (LRDR)** framework, which provides two types of commitments:
+
+- **Tier 1: Data at Rest** - Guarantees where customer data is stored. All ADR services include Tier 1 commitments.
+- **Tier 2: Data Processing** - Guarantees where customer data is processed during normal operations. Available for eligible services in specific geographies.
+
+For customers with _Advanced Data Residency_ in eligible geographies who also have a paid Microsoft 365 Copilot subscription, **Microsoft 365 Copilot and Microsoft 365 Copilot Chat** automatically includes both Tier 1 and Tier 2 commitments. This means Copilot interactions are both stored and processed within the customer's _Local Region Geography_ under normal operations. 
+
+**Requirements for Tier 2 Processing Commitments:**
+1. Active _Advanced Data Residency_ subscription with sufficient license coverage
+2. At least one (1) paid eligible Microsoft 365 Copilot license
+3. _Tenant Default Geography_ within an eligible _LRDR Processing Eligible Geography_
+
+For more information, see [Microsoft 365 Copilot and Microsoft 365 Copilot Chat](m365-dr-workload-copilot.md).
+
+All other ADR services listed below currently provide Tier 1 (data at rest) commitments only.
+
+The following services are included in _ADR_:
+
+**Services with Tier 1 + Tier 2 Commitments (in eligible geographies):**
+- [Microsoft 365 Copilot and Microsoft 365 Copilot Chat](m365-dr-workload-copilot.md) - Includes both storage and processing commitments
+
+**Services with Tier 1 Commitments:**
 - [Exchange Online](m365-dr-workload-exo.md)
-- [Microsoft 365 Copilot and Microsoft 365 Copilot Chat](m365-dr-workload-copilot.md)
 - [Microsoft 365 web apps (formerly "Office for the Web")](m365-dr-workload-office-for-web.md)
 - [Microsoft Defender for Office P1 and Exchange Online Protection](m365-dr-workload-mdo-p1.md)
 - [Microsoft Purview](m365-dr-workload-purview.md)*

diff --git a/microsoft-365/enterprise/m365-dr-commitments.md b/microsoft-365/enterprise/m365-dr-commitments.md
@@ -24,7 +24,15 @@ ms.collection:
 > [!NOTE]
 > If you have purchased a _Multi-Geo_ subscription, then Microsoft will store certain customer data at rest in more than one _Geography_ based on your configuration even if you have purchased the _Microsoft 365 Advanced Data Residency add-on ("ADR")_.
 
-Microsoft makes commitments to store certain customer data at rest in the applicable _Local Region Geography_ for [eligible customers](advanced-data-residency.md#eligibility) that purchase _ADR_. The commitments are specified as follows.
+Microsoft makes commitments to store certain customer data at rest in the applicable _Local Region Geography_ for [eligible customers](advanced-data-residency.md#eligibility) that purchase _ADR_. These commitments are part of the Local Region Data Residency (LRDR) framework.
+
+**Tier 1 (Data at Rest) commitments** guarantee where customer data is stored. All ADR services include Tier 1 commitments.
+
+**Tier 2 (Data Processing) commitments** guarantee where customer data is processed during normal operations. Currently, only Microsoft 365 Copilot and Microsoft 365 Copilot Chat include Tier 2 commitments in eligible geographies. For more information, see [Microsoft 365 Copilot and Microsoft 365 Copilot Chat](m365-dr-workload-copilot.md).
+
+For more information about the LRDR framework and commitment tiers, see [Overview and Definitions](m365-dr-overview.md).
+
+The Tier 1 commitments are specified as follows.
 
 ## Exchange Online
 
@@ -46,10 +54,16 @@ The following customer data is stored at rest in the _Local Region Geography_:
 
 ## Microsoft 365 Copilot and Microsoft 365 Copilot Chat
 
+**Tier 1 Commitment (Data at Rest):**
+
 The following customer data is stored at rest in the _Local Region Geography_:
 
 - Any stored content of interactions with Microsoft 365 Copilot and Microsoft 365 Copilot Chat to the extent not included in the preceding commitments.
 
+**Tier 2 Commitment (Data Processing):**
+
+For tenants in _LRDR Processing Eligible Geographies_, Microsoft 365 Copilot interactions (sending user prompts and receiving responses from Azure OpenAI service) are processed in the customer's _Local Region Geography_ under _Normal Operations_. For details, see [Microsoft 365 Copilot and Microsoft 365 Copilot Chat](m365-dr-workload-copilot.md).
+
 ## Microsoft Defender for Office P1
 
 The following customer data is stored at rest in the _Local Region Geography_:

diff --git a/microsoft-365/enterprise/m365-dr-data-location.md b/microsoft-365/enterprise/m365-dr-data-location.md
@@ -23,6 +23,8 @@ ms.collection:
 
 This article is designed to help customers and Tenant Global Admins understand how they can determine where their in-scope customer data for Microsoft 365 services is currently stored at rest, and if their Tenant has a [_Durable Commitment on Data Location_](m365-dr-overview.md#table-1-definitions-and-terms).
 
+The _Data Location Card_ displays **Tier 1 (Data at Rest)** commitment information, showing where customer data is stored. Microsoft 365 Copilot and Microsoft 365 Copilot Chat also includes **Tier 2 (Data Processing)** commitments in eligible geographies. For more information about the Local Region Data Residency (LRDR) framework and commitment tiers, see [Overview and Definitions](m365-dr-overview.md).
+
 > [!NOTE]
 > A new _Data Location Card (DLC)_ experience is rolling out now to Microsoft 365 customer _Tenants_. During the phased rollout, _Tenants_ might see a different _Data Location Card_ view within the Microsoft 365 admin center than the latest enhancements shown in this article. Global Tenant Admins can refer to the following data location details in anticipation of the rollout.
 
@@ -34,7 +36,10 @@ The _Data Location Card (DLC)_ in the Microsoft 365 admin center allows Tenant G
 
 The _Data Location Card_ displays three columns outlining the covered _Services_, the _Current Geography_, and the _Committed Geography_.
 
-The _Current Geography_ refers to the location where the in-scope customer data is currently stored, while the _Committed Geography_ refers to the location where Microsoft stores in-scope customer data based on the [data residency commitments applicable to the _Tenant_](m365-dr-overview.md#overview-of-data-residency).
+The _Current Geography_ refers to the location where the in-scope customer data is currently stored (Tier 1), while the _Committed Geography_ refers to the location where Microsoft stores in-scope customer data based on the [Tier 1 data residency commitments applicable to the _Tenant_](m365-dr-overview.md#overview-of-data-residency).
+
+> [!NOTE]
+> The _Data Location Card_ shows Tier 1 (Data at Rest) commitment locations. Microsoft 365 Copilot also includes Tier 2 (Data Processing) commitments in [eligible geographies](m365-dr-workload-copilot.md).
 
 ## Finding The Commitments Applicable to a Microsoft 365 Service
 

diff --git a/microsoft-365/enterprise/m365-dr-overview.md b/microsoft-365/enterprise/m365-dr-overview.md
@@ -29,7 +29,7 @@ In order to promote clarity in the capability descriptions on data residency fun
 
 | Term | Definition |
 |:-----|:-----|
-|Advanced Data Residency (ADR) |A Microsoft 365 add-on service that guarantees customer data residency for a defined set of services. See [Table 2](m365-dr-overview.md#table-2-durable-commitments-on-data-location-by-microsoft-365-service) below. |
+|Advanced Data Residency (ADR) |A Microsoft 365 add-on service that guarantees customer data residency for a defined set of services, extending from data-at-rest (Tier 1) to include data processing commitments (Tier 2/Tier 3) for eligible services and geographies. See [Table 2](m365-dr-overview.md#table-2-durable-commitments-on-data-location-by-microsoft-365-service) below and [Advanced Data Residency](m365-dr-commitments.md) for details. |
 |Current Geography |_Current Geography_ refers to the location where _Microsoft 365 Core_ and _Expanded Service_ (ADR-scoped) data is stored for the service. **Note:** In certain scenarios, _Current Geography_ may differ from _Committed Geography_, such as during migration, due to ADR license validity, or at the time-of-service provisioning and activation relative to the availability of the _Local Region Geography_. For detailed information on these cases, visit [Learn More About the Data Location Card](m365-dr-data-location.md). |
 |Committed Geography |_Committed Geography_ refers to the location where Microsoft will store in scope customer data at rest for certain Microsoft 365 services. This location is determined by the _Durable Commitments on Data Location_ applicable to the _Tenant_. Visit [Available Data Residency by Country/Region](m365-dr-overview.md#table-3-durable-commitments-on-data-location-by-geography) for more information. |
 |Data Location Card |The _Data Location Card_ is located within the "Data location" section of the Microsoft 365 admin center portal. Navigate to **Admin** > **Settings** > **Org settings** > **Organization profile** > **Data location**. <br/> <br/> For specific information on how to use the Data Location Card, refer to [Learn More about The Data Location Card](m365-dr-data-location.md). |
@@ -51,9 +51,15 @@ In order to promote clarity in the capability descriptions on data residency fun
 |Macro Region Geography 4 – European Union/EFTA |Data centers in Austria, Finland, France, Germany, Ireland, Italy, Netherlands, Poland, Spain, Sweden, Norway, and Switzerland. <br/> <br/> **Note:** This term is referenced as “European Union/EFTA” on the _Data Location Card_. |
 |Microsoft Entra ID |Microsoft Entra ID is the new name for [Azure Active Directory](/entra/fundamentals/new-name). |
 |Microsoft 365 admin center Data Location |To see the _Primary Provisioned Geography_ for Exchange Online, SharePoint, OneDrive, and Microsoft Teams, refer to the Microsoft 365 admin center by navigating to **Admin > Settings > Org settings > Organization profile > Data location**. |
+|Local Region Data Residency (LRDR) |A data residency framework where customer data is confined to a single _Local Region Geography_. LRDR provides two types of commitments:<br />• **Data at Rest (Tier 1)**: Customer content stored within one _Local Region Geography_<br />• **Data Processing (Tier 2/Tier 3)**: Computations, transformations, and AI inference performed within the same _Local Region Geography_<br /><br />LRDR is incompatible with Multi-Geo Capabilities, which by design distribute data across multiple _Local Region Geographies_. |
+|LRDR Processing Eligible Geography |Geographies where Tier 2/Tier 3 processing commitments are available for Microsoft 365 Copilot. Includes: Australia, Canada, Germany, India, Italy, Japan, Malaysia, Poland, Singapore, South Africa, Spain, Sweden, Switzerland, United Arab Emirates, United Kingdom, and United States. Availability is phased; see the [Data Residency for Microsoft 365 Copilot and Copilot Chat](m365-dr-workload-copilot.md) page for details. |
 |Microsoft 365 Core Services |Exchange Online, SharePoint and OneDrive, Microsoft Teams, Microsoft 365 Copilot and Copilot Chat |
 |Microsoft 365 Expanded Services |Microsoft Defender for Office P1 and Exchange Online Protection, Microsoft 365 web apps (formerly known as "Office for the Web"), Viva Connections, Microsoft Purview* |
 |Microsoft 365 Multi-Geo Capabilities |_Microsoft 365 Multi-Geo Capabilities_ allows a single _Tenant_ to store customer data-at-rest across multiple geographies rather than be limited to the single _Primary Provisioned Geography_. See the _[Multi-Geo](microsoft-365-multi-geo.md)_ page for more detail. |
+|Normal Operations |Standard operational state where Microsoft 365 services are fully available and functional, with no active service incidents, scheduled maintenance, or outages. Processing commitments apply during Normal Operations; certain exclusions may apply during non-normal operations. |
+|Tier 1 Commitment |_Local Region Data Residency_ (LRDR) for data at rest. Customer data is stored within the relevant _Local Region Geography_ for eligible customers, according to Microsoft Product Terms and Advanced Data Residency. |
+|Tier 2 Commitment |_Local Region Data Residency_ (LRDR) for data processing. Microsoft 365 Copilot interactions (user prompts and responses from Azure OpenAI) are processed in the customer's _Local Region Geography_ under _Normal Operations_. Extends Tier 1 storage commitments with processing guarantees. Available for eligible tenants with Advanced Data Residency. |
+|Tier 3 Commitment |_Local Region Data Residency_ (LRDR) for data processing with in-region redundancy. Microsoft 365 Copilot interactions are processed in the customer's _Local Region Geography_ with in-region redundancy. Future capability extending Tier 2 commitments. |
 |Microsoft 365 Service provisioning country mapping |Refer to [data maps](https://aka.ms/datamaps) to learn where a given service provisions specified customer data, based on the _Tenant Default Geography._ |
 |Microsoft 365 Service provisioning mapping |All Microsoft 365 services use the _Default Geography_ to determine where a given _Tenant's_ specified data will be provisioned and stored. |
 |Preferred Data Location (PDL) |Used for _Tenants_ with a _Multi-Geo_ subscription. A property set by the Global Tenant Admin that indicates where the user or shared resource's data should be stored at-rest. See the _[Multi-Geo](microsoft-365-multi-geo.md)_ page for more detail. |

diff --git a/microsoft-365/enterprise/m365-dr-product-terms-dr.md b/microsoft-365/enterprise/m365-dr-product-terms-dr.md
@@ -24,6 +24,10 @@ ms.collection:
 > [!NOTE]
 > This document is intended to provide a general overview of the _Microsoft Privacy and Security Product Terms_ ("_Product Terms_") in relation to Microsoft 365 data residency commitments. In the event of a discrepancy, the official terms listed on the [Privacy and Security Product Terms webpage](https://www.microsoft.com/licensing/terms/product/PrivacyandSecurityTerms/all) shall prevail.
 
+## Tier 1: Data at Rest Commitments
+
+_Microsoft Privacy and Security Product Terms_ provides **Tier 1 data residency commitments** - guaranteeing where customer data is stored at rest. These commitments do not extend to data processing locations. For data processing commitments (Tier 2), see [Advanced Data Residency](advanced-data-residency.md).
+
 _Microsoft Privacy and Security Product Terms_ included with Microsoft's Cloud Product Terms provides data residency commitment under the following conditions:
 
 **Terms apply to**: _Tenants_ with a _Default Geography_, regardless of date of initial provisioning, of Australia, Brazil, Canada, France, Germany, India, Japan, Norway, Qatar, South Africa, South Korea, Sweden, Switzerland, the United Kingdom, the United Arab Emirates, United States, and the European Union.

diff --git a/microsoft-365/enterprise/m365-dr-workload-copilot.md b/microsoft-365/enterprise/m365-dr-workload-copilot.md
@@ -37,6 +37,10 @@ The content of interactions and the related semantic index with Microsoft 365 Co
 
 ## Data Residency Commitments Available for Microsoft 365 Copilot and Copilot Chat
 
+Microsoft 365 Copilot offers two types of data residency commitments through Local Region Data Residency (LRDR):
+- **Tier 1: Data at Rest** - Where customer data is stored
+- **Tier 2: Data Processing** - Where customer data is processed (available in eligible geographies)
+
 ### Product Terms
 
 Required Conditions:
@@ -45,6 +49,8 @@ Required Conditions:
 
 **Commitment:**
 
+**Tier 1 (Data at Rest)**: Content of interactions with Microsoft 365 Copilot and Copilot Chat are stored at rest in the relevant geography.
+
 _For current language, refer to the [Privacy and Security Product Terms](https://www.microsoft.com/licensing/terms/product/PrivacyandSecurityTerms/all) and view the section titled "Location of Customer Data at Rest for Core Online Services."_
 
 ### Advanced Data Residency (ADR) add-on
@@ -61,10 +67,47 @@ Required Conditions:
 
 **Commitment:**
 
-Refer to the [ADR Commitment page](m365-dr-commitments.md#microsoft-365-copilot-and-microsoft-365-copilot-chat) to understand the specific data at rest commitments for Microsoft 365 Copilot. Examples of the committed data include:
+**Tier 1 (Data at Rest)**: Refer to the [ADR Commitment page](m365-dr-commitments.md#microsoft-365-copilot-and-microsoft-365-copilot-chat) to understand the specific data at rest commitments for Microsoft 365 Copilot. Examples of the committed data include:
 
 - "Content of Interactions" such as the user's prompt and the response from Microsoft 365 Copilot or Microsoft 365 Copilot Chat, including citations to any information used to ground Microsoft 365 Copilot's response.
 
+**Tier 2 (Data Processing)**: For tenants in _LRDR Processing Eligible Geographies_, ADR extends to include in-country processing commitments. Microsoft 365 Copilot interactions (sending user prompts and receiving responses from Azure OpenAI service) are processed in the customer's _Local Region Geography_ under _Normal Operations_.
+
+#### LRDR Processing Eligible Geographies and Phase-in Schedule
+
+Tier 2 processing commitments are being phased in across eligible geographies:
+
+**Phase 1 (CY25-Q4)**:
+- Australia
+- India  
+- Japan
+- United Kingdom
+
+**Phase 2 (CY26-Q1)**:
+- Singapore (Government tenants only)
+
+**Phase 3 (CY26-H1)**:
+- United Arab Emirates
+
+**Phase 4 (CY26-H2)**:
+- Canada
+- Germany
+- Italy
+- Malaysia
+- Poland
+- South Africa
+- Spain
+- Sweden
+- Switzerland
+- United States
+
+> [!NOTE]
+> Tier 2 processing commitments apply to eligible tenants with Advanced Data Residency during _Normal Operations_. Certain exclusions apply, including Microsoft 365 Copilot Chat (Web Query functionality), Multi-Geo tenants, Educational (EDU) tenants, and preview features. For the complete exclusion list, see [Advanced Data Residency](m365-dr-commitments.md).
+
+#### Automatic Tier 2 Upgrade for Existing ADR Customers
+
+Existing ADR customers in Phase 1 geographies automatically receive Tier 2 processing commitments when their geography becomes available. No tenant admin action is required. New ADR customers must use the existing ADR commitment confirmation workflow in the Microsoft 365 admin center.
+
 ### Multi-Geo add-on
 
 Required Conditions: