Honestly, with open source models I don't think this regulation means anything because there's no way they can really regulate what's coming out of china. I don't think this affects innovation in AI much at all (unless your definition of innovation is "pour more money into diminishing scaling"). It's mostly just bad news for the US frontier labs, and based on their behavior I don't feel sad for them AT ALL. Like, they've basically alienated the vast majority of people by outright threatening their livelihoods or even society at large, and now we're supposed to feel sorry for them because they can't just go around saying "THIS WILL REPLACE ALL JOBS IN A MONTH!" without consequences?