It’s not clear whether Europe has the capability to compete with US tech right now.

It obviously does not. But, there is nothing preventing it. The US has given away all of our foreign scientists, if Europe wants them. All Europe has to do to take the lead in tech is ramp up research spending by an order of magnitude or two to match what the US used to spend (the US still outspends Europe on research, even after massive haphazard cuts and disruptions). Europe also has to welcome immigrants. Another thing many European countries have not always been great at, and some recently have become quite bad about. The regressive nationalist right is ascendant in many places, including some European countries.