Big AI is a thing. Insane money and construction projects makes the government invested in it one way or the other. It can't fail or it'll cause economic shock. It's a play to normalize it and make everyone depend on it before people question how they trained it all on their data and now drive them out of their jobs.

If they ask for a moat they will get it, the government can simply require licensing for hardware required to run any model comparable to the cloud ones (for "national security"). good local models will only be used by .01% who are crazy neckbeards running servers in their basement and even then they will suck compared to cloud ones.