I think it's to put a regulatory limitation on local run models, these frontiers companies might argue that such a technology which can be self run by a regular user would be disastrous and they want the government to regulate the release of these local models cough Chinese distilled models cough, hence regulating every other new ai companies. Oh these American companies are exempt because they are the moral companies who would never do anything disastrous.

So it's kinda a way to snuff the small competitors companies so they can slow down their cash burning (they need to throw in millions every day to keep ahead of the local models) so they can at last finally raise price for their products since there is no competition. So basically it's a fuckin cartel that need government help to make profit