Is this how Data URL works?

So currently, I’m going through the second part of the HTML/CSS course, specifically in the data URL’s video, and a question came to my mind:

If we embed an image using this technique (DATA URL), wouldn’t it be the same as calling the image from an external website?

For instance, in the lesson, Mosh uploads the image to and then he calls it from VS code using a data link, that means that if cssportal would be down for whatever reason, then the image wouldn’t be able to load on my site.

Is that correct or do I misunderstand what Data URL is about?

Thank you.