There are two problems with that scenario:

1. Your European startup will be competing with others using a much better frontier model. In a scenario where you already have other major disadvantages (access to capital, labor), you might be outcompeted

2. Open models have been keeping pace very nicely, but they rely on distillation of frontier models. If the race gets really tight, this could be affected so that the time gap grows larger (ie, it's very unlikely anyone but Anthropic is distilling from Mythos at the moment)