We can see China and the US developing AI tooling (and other tech) at a high speed. One of the reasons for this is the lack of regulation and even active deregulation. In the EU, we won't be able to keep up with this speed because we tend to want to regulate first and many of our regulations hinder gathering the insane amounts of data needed.
Falling behind on AI and not wanting to be dependent on tools from outside the EU will put us at a significant disadvantage in research and production of new technologies and we're already far behind in that aspect.
We also don't want to drop our values just to keep up. Which is partially because we're still in the luxury position of being very rich. I wonder, though, whether we can keep this going in the current state of the world. Things seem to have changed massively in our disadvantage over the past 5 or so years.