Techniques for a flexible data security and machine learning system for merging third-party data are provided. In one technique, the system receives a data set from a third-party entity and receives selection data that indicates that the third-party entity selected a set of data security policies that includes an encryption option and a data mixing option from among multiple data mixing options. In response to receiving the selection data, the system stores data that associates the set of data security policies with the data set, encrypts the data set according to the encryption option, and persistently stores the encrypted data set. Later, the system decrypts the encrypted data set in volatile memory, generates, based on the data mixing option, training data based on the decrypted version of the data set, trains a machine-learned model based on the training data, and stores the machine-learned model in association with the data set.