I understand Apple's position on this one. This is essentially a backdoor into all of your data. It is also a very useful feature. The EU regulators are disallowing guardrails without which this backdoor will be used to strip-mine people's personal data. The privacy implications are not legible to most people. If I was more cynical I would suggest that this is being used as an end-run around encryption, since the enc…
The way Apple Health exchanges data with 3rd-party trackers (Fitbit, Garmin, etc.) is very well built and a good model of how other components in iOS could allow data exchange with very granular permissions.
Apple touts the "Private Cloud Compute". If they found a way to share your personal context to process on their cloud in a private and anonymized way, there is no reason the same process couldn't be used to handoff data to a 3rd party AI provider.