Because the business model for governments is difficult. Income are mostly taxes, so you have to be able to explain constantly why it is a good idea to keep on spending budget on that funding.

If AI optimists are correct, and AI can increase productivity across the board, tax revenues go up. Not rocket science.

Governments don't have a business model. They don't need to make a profit. (Also, debt doesn't work the same way for the federal government that it does for a business or even a US state.)

see, for just one take on this, https://www.ucdavis.edu/magazine/why-federally-funded-resear...

It feels like governments might not be as stable as a company to fund large scale research given how many years can a government last. I have discussed with a friend at Argonne National Laboratory how quickly projects can die and management change based on ruling party. That being said, there are some topics the US government keeps funding no matter the party.