Have you considered that the EU's privacy laws may simply be onerous and burdensome, and the fact that a web of red tape has caught another fly may not actually reflect on the privacy claims of "groundbreaking Private Cloud Compute"?

The DMA is not a privacy law.

Yes because DMA doesn’t force 3rd parties to be groundbreakingly secure.

Literally anyone could whip up an AI service, get people to use it and just browse the unencrypted logs for data to sell.

Which is the issue Apple is having.

put quotes on privacy laws.