Oh sure the EU is terrible at all technology policy but it also seems like this is sort of a don't interrupt your enemy when they are making as mistake situation.

If the US commit to handicapping their AI industry like this it's going to destroy the competitiveness of those companies globally. All of those US spending commitments on data centres etc are going to collapse, or americans will need to pay 2x the token cost of the rest of the world. Both very bad options.