US cloud giants fund study warning of €115 billion cost from EU sovereignty plan

Study conflicts with Commission estimate

A study commissioned by CCIA Europe, whose members include Amazon, Google and Meta, says the European Commission's proposed Cloud and AI Development Act could cost Europe €115 billion over the next decade. The research, conducted by the European Centre for International Political Economy, says the figure is more than six times the Commission's upper estimate of €18 billion.

The report targets Article 31 of the proposed legislation, which it says could allow the Commission to extend sovereignty requirements into essential private-sector services. CCIA argues that moving away from existing cloud infrastructure could trigger expensive software redevelopment projects, with code rewriting and re-architecting accounting for 69 percent of its estimated costs.

Private sector figure rests on modeling

The study puts direct public-sector costs at €33.3 billion, with a further €80 billion potentially falling on private companies in sectors including banking, healthcare, energy and transport. It attaches a caveat to the €80 billion figure: it assumes the Commission extends sovereignty requirements beyond public procurement to cover 25 percent of cloud workloads in essential private-sector industries.

That makes the €80 billion figure a modeled scenario rather than a bill Brussels has already handed to European businesses. Luxembourg would face the largest estimated hit at €1,711 per worker over ten years, followed by Denmark at €905, Austria at €900, Finland at €864 and Ireland at €856.

CCIA urges narrower safeguards

CCIA is urging EU governments to overhaul the proposed legislation, limit sovereignty restrictions to sensitive workloads and abandon requirements based on corporate origin or personnel nationality in favor of what it calls risk based technical safeguards.

Mitchell Rutledge, CCIA Europe's policy manager, said member states cannot rely on the Commission's incomplete estimates when deciding CADA's strict sovereignty requirements for cloud and AI providers. He said taxpayers and businesses will foot the bill, yet the official assessment missed 70 percent of CADA's true impact.

Amazon has been developing its AWS European Sovereign Cloud, while Google markets a range of sovereign cloud solutions. Meta, another CCIA member, has interests in European AI infrastructure, although it is not a commercial cloud provider on the scale of AWS or Google Cloud. Neither AWS nor Google responded to The Register's questions.

Sources: The Register