The thing, western governments fear is AI-powered terminators. They want the tech first, so they can win the war when someone attacks them. That is the arms race part.
I think you're right that this is what they are thinking, but they are being idiots.
My bash script terminators will easily destroy any AI terminators.
My bash scripts don't hallucinate, and aren't so bloated that they require an always-available link to a data center.
What we call "AI" today is not remotely close to being a good combat-ready solution.
The winners of any coming AI war won't win it with the bullshit slop-peddling tools being pushed by con artists, today.