Most software businesses operate internationally, so the EU regulation is something you'll have to deal with no matter where you host, assuming you sell into the EU. I don't believe that hosting in the EU means you need to treat non-EU jurisdictions with EU law.
Note too that places like OVH have data centres in multiple countries, just like AWS and Azure do. I can't comment on taxes for companies registered in the EU as I don't live there, but again, where you are headquartered as a business is up to you, and there are many choices.
In terms of being competitive, some European services like OVH, Gandi, and Mistral are absolutely competitive internationally. For AI, Mistral is up there with the best of them.
Note too that places like OVH have data centres in multiple countries, just like AWS and Azure do. I can't comment on taxes for companies registered in the EU as I don't live there, but again, where you are headquartered as a business is up to you, and there are many choices.
In terms of being competitive, some European services like OVH, Gandi, and Mistral are absolutely competitive internationally. For AI, Mistral is up there with the best of them.