The reality is that software is valued like it is hardware, but has a teeny fraction of the input costs and running costs. The government didn't have to do anything, investors naturally ran to the software "copy+paste" money printer. Build it once with only labor costs and then copy for nothing infinite times.
To build a $100M software company you need 5 capable friends and a cloud account. To build a $100M hardware company you need $500M.
To build a $100M software company you need 5 capable friends and a cloud account. To build a $100M hardware company you need $500M.