There are plenty of technologies that absolutely do not "make the world better" but unfortunately must get built because humans are shitty to each other. Weapons are the obvious one, but not the only one. Often countries pass laws to encourage certain technologies or productions so as not to get outcompeted or outproduced by other countries.

The argument here about AI is exactly this sort of argument. If other countries build vastly superior AI by have fewer developmental restrictions, then your country maybe both at a military disadvantage but also at an economic disadvantage because you can be easily outproduced by countries using vastly more efficient technology.

You must balance all the harms and benefits when making laws, including external to the country issues.