Kyle argues that the EU doesn't need full deregulation but rather an investor-friendly environment for AI startups. He explains that two years of regulatory uncertainty around the EU AI Act has already caused companies to relocate to the US, since cloud-based businesses can operate from anywhere. Kyle believes it's too late for deregulation to help because the damage is done - the EU's AI startup ecosystem never developed, and they're now building data centers that will match today's US capabilities in 2-3 years, leaving them permanently behind.