Even without the problem of insufficient financing, you probably need to bend some rules to be at the top of LLM game (not just how you collect the training data, we all sort of forgot that Altman was kicked out of OpenAI because the board thought he was prioritizing features over security).
With all the regulations and paperwork around EU projects, I can't really see them competing against private sector.
Data is getting scraped, models are being built, nobody is really going to stop that now.
You may wish it wasn't like that (not you, but all of us), but there's no way China or USA block their companies in development of key technology like this, and I think we (EU countries) should act in the same way.
With all the regulations and paperwork around EU projects, I can't really see them competing against private sector.