I think his reasoning was pretty clearly presented as not the goodness of their heart but rather the medium to long term predicted outcome on their bottom line. Ultimately failing or getting tangled up with regulators any more than necessary is to be avoided. If you move too early and it chases people away from your platform which undermines your ability to keep innovating then a competitor who held back will ultimately eat your lunch.

But then there is no safe way for them to "mortally wound" the software industry. The full argument is moot.

I would add there are more reasons why this wouldn't work: costs due to OOM more usage, adoption/AI backlash, adversarial environment, players with big head starts (Google).