Firstly, the EU has a history of crippling their native tech industry to the general detriment of the EU. It is quite possible that this will end up being one more nail in the coffin.
Secondly, they're fighting economics on this one. AI seems to be cheap and accessible. In practice controlling the things that this article discusses is probably going to be impossible. It is like banning communism or nazi-ism - we'd do it if it was possible. It isn't. Attempts to ban the idea just make the whole situation worse. It is well nigh impossible to ban modes of thinking, and AI appears to be one of those.