Generative AI Leader Practice Question: Business Strategies for Generative AI Solutions
A healthcare company wants to use generative AI to summarize patient records but must comply with HIPAA. Which deployment option should they choose?
⚠ Common exam trap
A common mix-up: candidates assume cloud providers like Google Cloud or AWS are automatically HIPAA-compliant with data residency, but they overlook the shared responsibility model and the need for a BAA, which still exposes data to the provider's infrastructure and potential third-party risks, making on-premises the only option that guarantees full data control.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Use an on-premises deployment of open-source model
An on-premises deployment of an open-source model ensures that all patient data remains within the organization's controlled infrastructure, never leaving the local network. This eliminates any risk of data transmission to external cloud services, which is critical for HIPAA compliance where protected health information (PHI) must be safeguarded against unauthorized access or breaches. On-premises solutions allow the organization to implement its own security controls, encryption, and audit trails without relying on a third-party's compliance posture.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Use Vertex AI on Google Cloud with data residency
Why it's wrong here
Data residency alone may not satisfy all HIPAA requirements.
- ✗
Use Google Workspace AI
Why it's wrong here
Not intended for processing protected health information.
- ✓
Use an on-premises deployment of open-source model
Why this is correct
Full control over data and compliance.
- ✗
Use a third-party API
Why it's wrong here
Shares data with external vendor, likely violates HIPAA.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This Generative AI Leader practice question is part of Courseiva's free Google Cloud certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the Generative AI Leader exam.