ECIPE — European Centre for International Political Economy

A study by ECIPE

Cloud and AI Development Act (CADA)

The real-world economic impact of the Cloud and AI Development Act

Impact by country

Latvia

€437m
10-year exposure, Medium scenario
€291m
One-off migration cost, Medium
€12m/yr
Recurring price effect, Medium

Cost per person in the working-age labour force

Per economically active person (age 20–64), 10-year horizon

Measure Narrow Medium Broad
10-year total economic exposure €149 €495 €1,029
Effect on the real GDP level -€5 -€20 -€45

Annual recurring cloud-service price effects

€ million, 2025 expenditure base

Sector
Scenario Per year 5 years 10 years
Narrow €5m €25m €50m
Medium €12m €61m €122m
Broad €24m €121m €243m

Migration and systems-redesign costs

Present value of one-off transition costs, € billion

Sector
Narrow €73m
Medium €291m
Broad €613m

Ordinary public support

€ million, public sector

Narrow €0.1m
Medium €1.4m
Broad €4.3m

Transition scarcity costs

Present value, € million, public and private sectors combined

Narrow €0.1m
Medium €1.2m
Broad €5.2m

Downstream ICT-vendor exposure

Domestic vendors affected, and annual value added at risk

—
Narrow – vendor equivalents affected
2
Medium – vendor equivalents affected
3
Broad – vendor equivalents affected
€7.4m
Narrow – annual value added at risk
€29m
Medium – annual value added at risk
€67m
Broad – annual value added at risk

Combined delayed cloud and AI benefits

€ billion, forgone productivity gains

Narrow €0.3m
Medium €4m
Broad €14m