This also completely screws over U.S. businesses. American startups will be forced to pay premium prices for nerfed, heavily-censored, 'compliant' models from a few massive corporations. Meanwhile, foreign startups will be running cheaper, unrestricted open-source AI. We'll price ourselves right out of the global market.

What government wants to have their population use foreign AI. (Not many). Only issue I see is good enough is what the majority might be okay with.