I believe the private sector is sufficiently motivated to pursue AI without the government getting involved in funding it. An atom bomb is something that
has to be developed by the government (the entity that would ultimately use it). I just don't think AI is in the same category.
For what it's worth, Bill Gates disagrees with me:
"Market forces won’t naturally produce AI products and services that help the poorest. The opposite is more likely. With reliable funding and the right policies, governments and philanthropy can ensure that AIs are used to reduce inequity. Just as the world needs its brightest people focused on its biggest problems, we will need to focus the world’s best AIs on its biggest problems."
https://www.gatesnotes.com/The-Age-of-AI-Has-Begun