This should be unsurprising- see also govcloud: https://aws.amazon.com/govcloud-us

The US government likes its employees and contractors to have their own separate version of cloud products. For instance you would not want OpenAI using prompts about controlled unclassified information as training data. Most of the things government contractors do is CUI- you don't want it spread around, but it's not actually a secret. The US goes out of its way to minimize how much CUI is exposed, and on top of that you have export controls like ITAR and then of course classified information.