Prajwal S You can copy the files from SharePoint online to Azure Blob Storage or a file share and few of the viable options discussed below. Copy files from sharepoint to azure blob storage using logic apps - Microsoft Q&A and https://learn.microsoft.com/en-us/answers/questions/760249/data-migration-from-sharepoint-to-azure-file-share
In Azure Blob storage, you have the flexibility to grant permissions to users at the container level following data migration. You can achieve this by utilizing AD-based authentication or by creating Shared Access Signatures (SAS) at the container level. This allows you to efficiently manage and access data within individual containers using tools like Storage Explorer. Create shared access signature (SAS) tokens for storage containers and blobs - Azure AI services | Microsoft Learn
In Azure file share, you might have to enable AD-based authentication so that the user can have a specific permission to the file share via SMB.
To configure Windows ACLs, you'll need a client machine running Windows that has line-of-sight to the domain controller. If you're authenticating with Azure Files using Active Directory Domain Services (AD DS) or Azure Active Directory Kerberos (Azure AD Kerberos) for hybrid identities, this means you'll need line-of-sight to the on-premises AD. If you're using Azure Active Directory Domain Services (Azure AD DS), then the client machine must have line-of-sight to the domain controllers for the domain that's managed by Azure AD DS, which are located in Azure.
Control what a user can do at the directory and file level - Azure Files | Microsoft Learn
Please go through below article which will give more examples.
https://www.smikar.com/azure-blob-storage-vs-azure-file-storage/
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