I suspect the steel man version of the argument is that AI is capable of producing images indistinguishable from child and revenge porn, so it must be regulated

I suspect the steel man version of the argument is that AI is capable of producing images indistinguishable from child and revenge porn, so it must be regulated, and that means they need a way to reach into your zeros and ones to check. Maybe they want to know you're not asking it how to terrorize people, too. Hence, the confluence of AI and encryption.