In my opinion, being "Not American" or "Not Chinese" is not a good business model long-term.

Exactly..

What happens when the capability of American models far exceeds the capability of non-American models? Wouldn't companies using American models have a huge advantage?

Yep. This. That's why I don't think it's a viable business model.

Also, OpenAI and Anthropic will just open EU offices and subsidiaries.