Because Executive Orders aren’t laws. They’re just guidelines for the executive branch of the federal government, which the POTUS is in charge of. It can’t affect private entities like AI businesses, because that would require an actual act of congress.

Notably, this would potentially determine what kinds of contracts the executive branch was able to make. For instance, maybe the government wants to contract out a LLM instead of building their own. This EO could affect which companies are able to bid on that contract, by adding these same restrictions to any LLM that they provide. But on its own, the EO is just that; an order to the executive branch of the federal government.