Companies building frontier AI ("industry") can put more constraints on themselves that are stricter than what the government puts on them, leaving non-frontier companies able to compete and take bigger swings.
What we don't want is this self-regulation to be adopted by the government because it will then stifle competition, locking in the companies at the frontier. For those companies that are trailing, we want to create more of a Wild West so that they can challenge the status quo.