> Why don't they buy a considerable stake in these American social media companies instead

I'll assume this is made in jest, as for this

> I don't understand why the EU bothers wasting money on these initiatives.

I don't know, and I can't say I believe this should be a priority of any kind, but it probably costs them very little in both cash and man-hours, has the benefit of being self hosted rather than relying exclusively on third parties and I appreciate their endorsement of these federated platforms however small