1. They're too stupid to understand what they're truly funding.

2. They understand but believe they can control it for their benefit, basically want to "rule the world" like any cartoon villain.

3. They understand but are optimists and believe AGI will be a benevolent construct that will bring us to post scarcity society. There are a lot of rich / entrepreneurs that still believe they are working to make the world a better place.. (one SaaS at a time but alas, they believe it)

4. They don't believe that AGI is close or even possible

From any individual, up to entire countries, not participating doesn't do anything except ensure you don't have a card to play when it happens.

There is a very strong element of the principles of nature and life (as in survival, not nightclubs or hobbies) happening here that can't be shamed away.

The resource feedback for AI progress effort is immense (and it doesn't matter how much is earned today vs. forward looking investment). Very few things ever have that level of relentless force behind them. And even beyond the business need, keeping up is rapidly becoming a security issue for everyone.

And for your comparison, they did fund the American revolution which on its turn was one of the sparks for the French revolution (or was that exactly the point you were making?)

2. Most VCs are normal people that just want a bigger slice of pie, not necessarily a bigger share of the pie. See the fixed pie fallacy.