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

Luxembourg

€578m
10-year exposure, Medium scenario
€425m
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 €790 €1,711 €2,498
Effect on the real GDP level -€124 -€494 -€1,122

Annual recurring cloud-service price effects

€ million, 2025 expenditure base

Sector
Scenario Per year 5 years 10 years
Narrow €8.3m €41m €83m
Medium €12m €62m €123m
Broad €18m €88m €175m

Migration and systems-redesign costs

Present value of one-off transition costs, € billion

Sector
Narrow €170m
Medium €425m
Broad €611m

Ordinary public support

€ million, public sector

Narrow €0.2m
Medium €1.9m
Broad €6.2m

Transition scarcity costs

Present value, € million, public and private sectors combined

Narrow €0.1m
Medium €1.1m
Broad €3.5m

Downstream ICT-vendor exposure

Domestic vendors affected, and annual value added at risk

—
Narrow – vendor equivalents affected
1
Medium – vendor equivalents affected
3
Broad – vendor equivalents affected
€6.7m
Narrow – annual value added at risk
€26m
Medium – annual value added at risk
€60m
Broad – annual value added at risk

Combined delayed cloud and AI benefits

€ billion, forgone productivity gains

Narrow €0.7m
Medium €9m
Broad €29m