The EU is not a state or some federation. It's like a NAFTA+
It unfortunately doesn't have the risk averse VC system (or pragmatic state driven like China) ecosystem to support the scaling required.
But if models will be commodities, maybe that won't be such a terrible thing longterm?
Personally I don't. Wasting enormous amounts of resources on a technology that doesn't make money, can easily be copied, and eats up everyone's energy while at the same time can be downloaded over the internet is kind of stupid.
The fact that China could catch up in what, two years, shows that this is a commodity.