> If you're in a race and the person who's in the lead by a large margin says "this is getting out of hand, how about we take a break?" isn't it obviously in the interest of the disadvantaged party to agree?
Only if you trust the other party (which very clearly doesn't hold in this case) or monitoring the break can be done independently and reliably (it can't), and you expect the gap to narrow rather than widen during a pause (this is probably the case, with China expected to catch up).
> And if one of the parties can put a stop to the race like that at any time, is it really an arms race?
It is. It's a Prisoner's Dilemma: if the parties cooperate the best outcome is reached, but betrayal of either party still gains an advantage for either party from their perspective. Betrayal both ways just means both parties are equally fucked.
For nuclear weapons it has become quite clear that even for small players, being in the race and having at least a few nukes is far more rational than having none. Ukraine found out the hard way that giving them up in exchange for promises of good behavior just sets you up for getting stabbed in the back.
> The current balance between the US and China when it comes to AI strikes me as much more lopsided than the balance between the US and the USSR when it came to nuclear weapons.
I think people really underestimate the Chinese here. A lot of work in AI research, including in the USA, has been done by people with Chinese ancestry or even nationality. The Chinese education system definitely seems much better than the American one and there is also just a far larger number of Chinese graduates/researchers.
Add to that the stable political climate, state friendliness towards AI R&D, and a requirement to be creative in utilizing computing power rather than relying on brute force/numbers; Further revolutionary fundamental advances may very well originate there rather than in the USA.