EU cloud sovereignty rules could cost €115 billion, industry-funded research warns

The EU’s proposed Cloud and AI Development Act (CADA) could impose €115 billion in costs over the next decade, according to the European Centre for International Political Economy. Its research was funded by CCIA Europe, a trade body whose members include Amazon, Google, and Meta. The estimate exceeds the European Commission’s upper estimate of €18 billion for legislation that would exclude non-EU providers from parts of the cloud and AI market.

The researchers identified overlooked public budget exposure of €33.3 billion and said software re-architecting and code-rewriting account for 69% of CADA’s real-world impact. They also estimated private-sector spillover costs could reach €80 billion. CCIA Europe highlighted Article 31, which would allow sovereignty restrictions to extend beyond public procurement into sectors including banking, energy, healthcare, and transport. It warned that affected businesses would need to redesign applications built on global cloud architectures and AI platforms.

CCIA Europe wants restrictions limited to sensitive workloads with demonstrated public-order risks, with corporate-origin and personnel-nationality requirements replaced by risk-based technical safeguards. It also seeks country-screening exemptions for trusted international partners with bilateral EU procurement commitments. US providers offer European sovereign cloud services, but concerns persist because the US Cloud Act allows US law enforcement to demand access to data held by US firms, even when stored abroad.