Regulatory capture. They are the hyperscalers who invested and still invest heavily in hard tech, like data centers. They need regulation of "uncontrolled" AI models, so that Joe Smoe doesn't ditch his ChatGPT subscription and uses his local LLMs and agent harness setup in his home lab. Or some open weights model, or the condensed Chinese ones... it's "regulate everything else to death that is better than our enshittified OG models behind a paywall".
The trajectory is clear and the hyperscalers are in an disadvantage: they need to become bigger and bigger while models, frameworks and harnesses that are "good enough" for 95% of all people become smaller and specialized hardware becomes cheaper and less energy hungry. In the end the only viable customers that are left for the big ones is the military and... the military. But even the Pentagon realizes that a decentralized less fragile approach is actually safer instead of having big data centers that could be Wildberried by an adversary, that is if the alcoholic in charge isn't firing some generals who act too smart again. Machine vision which isn't even real AI is capable of destroying targets in Ukraine for instance. Dirt cheap. And Palantir's Maven Smart System was incapable of predicting the most obvious flaws in the Iran war, like how easy it is to to strike US bases or close the Strait of Hormuz. I'm not saying condensing the killchain is useless, I'm saying that it's not everything.
People aren't dumb. So they must be strong-manned and cheated into submission.