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There is some 450 million people living in the EU.
The GDP of all EU countries is about $20 trillion. There is more than enough scale in the EU.
It is strategically crucial for the EU to develop its own infrastructure. The alternative being that long term any crazy guy in Washington can pull the plug and any IP being subject to industrial espionage by default.
Who is going to finance it? Google and Microsoft barely could break into AWS market. There is a huge portfolio of services to write. 450 million is not much if the others have 4 billion customers.
It's network effects and the winner takes it all. Google and AWS are only in rhe market because they have a ridiculous amount of money to burn and the customer relations to pry away their share of the market.
Of course it is strategically crucial. That's why Microsoft and Google got involved. The EU is very late to the game. They must have noticed that China has built a competitor but they didn't start moving. Europe must invest more than Oracle, who also have money and customers, but not enough.
The problem is that China has one billion customers. If Europe and USA split further it could happen that each company could be too small for the next level.
"next level" of what? Having your data mined and the plug pulled by a geopolitical rival?
It is much cheaper in the long run to host within the EU even if the economics of scale only go 20% instead of 25%. Although this ignores, how a lot of companies are looking to move back out of "the cloud" because their fees there are absurdly high.
There is no magical advantage to going with the hyperscalers and there is also no "winner takes it all". As we saw with multiple Microsoft outages in the past year, being locked into one vendor makes you incredibly vulnerable.
Whatever is the next step, some things need scale. Google has their own AI chip. I think there are also specialized storage chips. Gates has a company for new nuclear reactors.
But that's the next step. First somebody has to catch up and establish cloud services in an environment that is as skeptical as the comments in this thread, with less money to burn and a smaller pool of developers.
The magical advantage of hyperscaler is not price but that new business ideas can be tried much faster with no need for hardware investments. They can keep running when a moment of social media attention brings a huge amount of new customers. An outage doesn't matter if everybody else is also down.
Of course the hyperscaler knows which apps are cash cows, as does the Android team, as do the credit card companies. Europe is not prepared for that future. As the CEO says, we can do what is left, supply chain optimizations, unless there is a fundamental change.