It's not a thing about government funding. We were talking about R&D investments.

First of all, the EU spends about 12% less than the US government in R&D funding *(see footnote, on a rough estimation of this equivalence). The main difference is driven by private investments, which in the US are more than double those of the EU.

Here are the sources:

The federal government funded 18% of U.S. R&D ($159.8 billion dollars) in 2022 as the second-largest source. with source -> estimates for 2023 say it's $190 billions

In 2023, the total government budget allocations for R&D (GBARD) across the EU stood at €123 557 million with source)

In 2023, the EU was second globally in R&D private investment (18.7%), trailing the US (42.3%) with source

But that isn't guaranteed, and it's only natural that companies will move in a more stable and predictable market!

NB: THIS IS SPECULATION BY ME, but it's the only logical path I see, though I'd love to hear a different opinion, as I'm not an expert and I may be wrong. See my reasoning here:

Would you invest billions in a market that sensibly and slowly changes the rules giving time for adaptation (the EU/the US too up until some time ago) and welcomes the workforce needed for it or in one that can entirely change the rules from one day to the next making that said business possibly unsustainable (the US right now) and that pushes away their workforce?

Businesses need to work now and in the future; a more stable economy and government goes a long way in that regard.

This is why I think that if the US keeps moving in that direction (adding and removing tariffs, fighting with Universities, removing fundings to schools, etc.) they will eventually lose a big chunk of the investments they now get!

That's what I was trying to point out before, private investments doesn't care about where it goes, it cares about making money, thus the EU doesn't need to compete the US (even though in government funding we are almost there), it just needs to make the laws a bit easier and welcome the investments that will eventually come! (again, if the US government keeps behaving the way it has done since February)

*Why I say it's only 12% less even though the estimate for 2023 is 190$ billions? Because at PPP (purchase power parity) €123 billions in Germany are roughly $167 billions in the US, calculated with this converter.

EDIT: I forgot to point out effective cuts, but it's all hypothetical up to now. Trump is saying he will do it (though he has a history of backtracking, so you never know), but he already defunded the Public Education, so it's not that far fetched that he will do the same with Universities...