Taking a view from outside the USA, European companies just had Fable taken away due to US export controls, and before that Anthropic announced it is holding their data for 30 days. There is immediate value to these firms to build their infrastructure around an AI that won’t be pulled away from them. And outside of Europe, other countries are more price sensitive and don’t have the same fear of building relationships with Chinese companies.
There is no such thing as a relationship with "chinese companies". In China there is just the State, and that is it.
If the world needs any more evidence of Europe's short-sightedness, it would be them running to China to spite the US (instead of creating fertile grounds for their own tech).
No one is running to China to "spite the US". Recent geopolitical developments have shown the US to be a violent, unpredictable and unreliable partner.
And you have that guarantee from Xi?
With openweights? Yes. It might halucinate a backdoor somewhere ( not that you can trust any model about that), but it will still work.