It’s clear that companies are currently unable to make chatbots like ChatGPT comply with EU law, when processing data about individuals. If a system cannot produce accurate and transparent results, it cannot be used to generate data about individuals. The technology has to follow the legal requirements, not the other way around.
The economic effects would still be enormous. You can amend my analogy to “banning internal combustion engines when their services are being sold to customers”, leaving them free for individuals to use to carry themselves around, and it’d still have a massive impact.
Europe’s not going to kneecap themselves over this.