Europe's failure to facilitate a competitive tech scene in the early 2000's (and even still ongoing today) will haunt them for decades. Such an enormous fumble that people still celebrate as a win.
EU is in a really tough situation. They're getting squeezed on all sides economically by USA and China while also facing a belligerent Russia on their eastern borders. And their internal politics and governance makes it very difficult to align in a direction that could enable them to start digging out of so much globalized dependence.
Along with Europe's incompetence and divisiveness, you must also consider that the US has kept it so tight under its umbrella that it has squeezed it. The US wants a rich market to sell into, a suitable ally for oil campaigns, but not a competitor.
The US is also still cultivating divisiveness, at the EU level, they groom a politically aligned minority that conveniently opposes any long-term improvement (Looking at Meloni's Italy, Hungary, etc.), at the country level, where possible, they again groom divisiveness by propping up yet another sovranist party.
Of course, that's what a "normal" competitor does, and of course China russia are also taking part in it. But the ambiguous situation of the USA-EU friendship needs to be solved.
I don't see how the EU can get out of this without recognizing that the US is not a friend anymore, and enduring a few decades of protectionism at the services level to try to pull a china on key sectors.
AI is gonna be even worse. At least there's some competition from scandinavia and germany and france's tech scenes. For AI there's basically none.
They tried. They were either spied on (Earth - then developed by Google) or aquired (Star Office by Sun).
It feels like an emphasis has been placed more on legislating or policing what other people make rather than making anything of value themselves (as far as tech goes).
Being a barnacle on the side of a boat might be a nice free ride for a while until it goes somewhere you don't want to.
"Europe" is, unlike the US, not a single entity. Yes, we have European Union which helps a lot, but it is not complete (and certainly wasn't in the time when Microsofts and Googles of this world started), making that all-important initial scaling way more difficult than it is in the US.