Data Storage launches AI continuity subsidiary for regulated industries

Data Storage Corporation (NASDAQ: DTST) announced the establishment of Sovereign AI Solutions, a wholly owned subsidiary focused on developing AI continuity infrastructure for regulated industries including healthcare, financial services, and insurance.

The company stated it will develop an AI Continuity Control Plane designed to support recovery, validation, and compliance for sovereign AI and AI Factory environments. According to the company, the platform aims to address what it identifies as a gap in purpose-built solutions for regulated industries to recover and maintain compliance when AI systems fail.

Data Storage reported that in fiscal year 2025, it completed a $40 million sale of its cloud solutions business and conducted a $29.3 million tender offer that reduced outstanding shares by approximately 72% to roughly 2.17 million shares. The company stated it currently carries no long-term debt.

Chairman and CEO Chuck Piluso said in a shareholder letter that the company identified a market gap where "no purpose-built platform currently exists to provide these regulated industries with the ability to recover, validate, and ensure that they remain in regulatory compliance if the AI systems on which they rely were to fail."

The subsidiary remains in the development stage and is pre-revenue. Data Storage said it plans to target regulated enterprises with a business model focused on recurring revenue streams.

The company's existing operations include Nexxis Inc., which provides telecommunications, internet access, and SD-WAN services. Data Storage stated this business provides a stable revenue base for the company.

Data Storage said it expects to provide commercial updates throughout the year as it advances the platform toward initial client engagements.

You May Also Be Interested In

• Boeing names Ryan Shedd as new SVP and controller
• loanDepot receives NYSE non-compliance notice over stock price
• Nuvectis Pharma (NVCT) files $200M mixed shelf