Humanity has lived for thousands of years without cloud and AI services. We can definitely live without those. In fact, considering the damage that is being done to the environment (and thus ourselves) in name of those services, we’d very likely be better off without them in the first place.

A large reason US services have such a presence in Europe is that their flagrant disregard for rules and the pursuit of profit at all costs gives them an unfair advantage. If those US companies cut off their services, in the long run the ones in the EU would have the room to expand within the rules. That’s the opposite of the doomsday scenario you’re describing. Though of course an abrupt cut would be momentarily disruptive, countries in the EU are already taking steps to reduce reliance on US services (for example: LaSuite).