There is most definitely innovation in Europe. It just gets bought by the US, who is quick to forget where the technology came from.
As for unicorns and trillion dollars companies... some may say it's a feature, not a bug. It's great to claim to have free speech and competition, but when a few people own a few big monopolies and control the media, is it real? Regulations are not bad.
Cope much?
As a European I'd rather not have half of our industries critically depend on AWS and Microsoft, especially now that the US has fully embraced governance by RNG. The choice isn't having or not having your own digital infrastructure, it's either having your own or having to depend on someone else.
Telcos sunk a considerable amount of money into building hosting facilities but could not deliver the same scale, international coverage and breadth of features that AWS could, so when Azure came around a lot of telco and datacenter people jumped ship.
Since then (it's been ten years for me) I've seen dozens of EU hosters consistently fail to add the kind of enterprise and security features that hyperscalers provide, and that IT departments _need_ for compliance purposes (Google is still catching up on some of those).
It's not about hosting VMs anymore or having Kubernetes for your startup, it's about the whole enchilada (auditing processes, distributed datacenters, management APIs, development ecosystem, etc.), and not even major hosting providers (some of which, by the way, were almost completely reliant on VMware...) can actually deliver.
And the same goes triple for all of the EU-sponsored/state-sponsored initiatives for datacenter creation/public cloud services/etc.
Telcos aren't going to be able to pivot this without paying for knowledgeable staff.