Mostly because it's generally a bad idea for government to try to compete with a brand new tech industry with hundreds of billions in private capital developing commercial models. If the American private industry does actually wash out vs Chinese open models there might be talent available for them to put money into, so maybe they are just preparing for that scenario in the meantime.
Commoditizing AI models serves the interests of just about everybody except for a relative handful of people in San Francisco. The more decentralized control of the technology is, the more its benefits can be realized by businesses and individuals rather than becoming a black hole of monopolistic rent seeking.
we're about witness the realization that "here's a tech that can make us a whole bunch of money" is actually "here's tech that will establish the next hegemony." american companies may compete with chinese companies on the former. only the USG can compete with the PRC on the former.
The American attitude is generally to let private companies build up a new industry so it can create jobs and pay taxes. However, in the LLM race, the Chinese open weight playbook pretty much killed that. China has basically commoditized LLMs. Chinese models are good enough, so the race has come down to who can offer the cheapest tokens.
Chinese open weight models are great for this turn, but American private models generate orders of magnitude more cashflow. This cashflow = investment in training future models. It's unclear how Chinese open weight companies are going to compete in future rounds if they can't raise the same capital for training runs.
The American business model is exceedingly efficient at building large businesses from zero. I wouldn't dismiss it as just a jobs creation thing.
> China has basically commoditized LLMs
What do you mean by "basically"?
Why are Anthropic's and OpenAI's annualized revenue about $50B each?
LLMs need massive amounts of compute to compete, so I wouldn't claim that the great (and leading, and likely to continue to lead) LLMs are commodities end-to-end, even if the non-executing-at-scale LLMs files and IP are commoditized. The execute, the compute, that is what breathes life into the model, which is otherwise weak or dead.
OpenAI's annual profit is $0,000,000,000,000