So the federal government industrial policy is the thing that supposedly will keep the prices on "A and O" high in the US while the rest of the world will get comparable AI competing to get cheaper and cheaper?

Basically, the US govt will say that foreign models and providers are a security risk and ban them. If the US has shares of Anthropic/OAI due to a sovereign wealth fund, it'll be billed as domestic industry protectionism too.

Yup. Just like electric cars. Actually, more like network gear - so only non-western countries.

Terrible ideas get executed all the time, despite the problems with them being well understood.