Why do we assume us providers aren't doing the same? Also all the Chinese providers are giving open weight models. Many you can run locally.
I don't see the risk. If your code is easily AI generated you don't have a moat anyways. A Chinese competitor probably won't have as easy of a time as a US one of you operate in the US
The US has robust IP and trademark law that allows companies some amount of chance to find a legal remedy to anyone who clones their business. China is notorious for protecting local companies from foreign IP suits.
Further, at a lot of companies, the risk has to be acceptable to shareholders and auditors. Perceived risk is often a more powerful motivator than actual risk.