Knative is an open-source platform for running serverless workloads on Kubernetes. It has two main building blocks: Serving, which runs containers as services that scale up on demand and down to zero when idle, and Eventing, which routes events between producers and consumers. Platform teams and developers use it to run HTTP services and event-driven applications on their own clusters. Knative is software installed on a Kubernetes cluster.
Knative is a project of the Cloud Native Computing Foundation, a US-based foundation, and is released under the Apache 2.0 licence. Because the code runs on the cluster your organisation operates, data stays where that cluster runs. The project website describes no hosted service and no data processing agreement. The practical sovereignty question is therefore where the cluster runs and which provider supplies the underlying Kubernetes and cloud infrastructure, since that provider may fall under foreign jurisdiction. For a European organisation, the choice of location and provider determines the outcome.