I think we need to start brainstorming on options 4 and 5.
Option 2 doesn't make any sense. Europe do not have any strategic advantage here, not the cheap energy, it actually doesn't have the money and it doesn't really have any strong enough capabilities in the hardware or software (yes I know about somes like ASML and open source software). Plus the price of RAM is out of control now.
Usually when you are at a strategic disadvantage you need to start thinking out of the box, or bet on the next thing. AI and "The Cloud" are not gonna be the last technology frontiers, in many ways it might be yesterday bet. It is like buying a stock close to the peak of a bubble.
The Taiwanese did not try to compete Toyota in the 80s, they created TSMC.
Of course do not expect the EU bureaucrats to do be able to do any out of the box thinking.