EU Cloud and AI Development Act could cost €115bn

A study by the ECIPE think tank suggests that the European Union’s proposed Cloud and AI Development Act (CADA) could result in an economic exposure of €115 billion between 2027 and 2036. The report, funded by the CCIA Europe lobby group—which includes members such as Amazon, Google, and Meta—estimates that the costs would be split between €33.3 billion for public budgets and approximately €80 billion for private sectors including banking, energy, and healthcare.

The primary drivers of these costs are software migration and rewriting, accounting for roughly 69% of the total, while increased cloud service prices account for 30%. The study presents three scenarios, with a broad estimate reaching as high as €233 billion.

In contrast, the European Commission’s own upper estimate for the impact of the legislation is significantly lower, at approximately €18 billion. The CADA proposal aims to establish levels of sovereignty for cloud services used by public bodies, ranging from data location requirements to strict controls over software development and ownership to reduce dependence on non-EU providers.