Sadly, the EU has already lost that competitiveness through many other similar regulatory situations. The real risk is not competitiveness in creating products, that's a lost battle already :( The real risk is losing competitiveness in even being able to work for the American companies that are creating products.
If everyone uses ChatSkyNet for programming (or even ChatGPT-4), but EU is not allowed, EU will simply lose its competitiveness in creating products.