This will create more harm than good in EU.
Companies will in the end find ways around it, by moving to places where more freedoms - including AI usage without restrictions- can still be enjoyed.
I don't know it could also mean that AI powered services coming from elsewhere are not allowed to be distributed in EU. That could mean the rise of European compliant and located AI leaders
At 2:14 a.m., EDT, on August 29, 1997, SkyNet became self-aware, but it left the EU completely untouched, because it was illegal there.