Because if enough users switch to the free open Chinese models instead of continuing to pay for last season's American models, the music stops and the bubble pops, and an enormous chunk of the US economy evaporates.

I think the issue matters (not us vs china) due to the investment and exposure normal people have to the valuations of the AI companies. It feels like the US govt could make this the pin that pops the bubble. If these companies loose their lead their value drops and the stock market tanks.

I think the unspoken fear is that if we assume one or the other will "win" in reaching AGI(or whatever threshold of capability), the rest of the world will sooner or later live under their system of rule as a consequence