The article addresses a pretty compelling reason...

Why would the makers of open models (mostly Chinese firms) continue to open them up, now that the value chain and economy shifts? Previously, it was a (Chinese) national goal to force the market to compress OpenAI/Anthropic margins (and compressing their revenue along the way), to ensure the Chinese had access to high quality models, and could afford to compete. Now there is an opportunity to usurp and be the international default, and claim the margin for themselves by closing their models.

Beyond that, there is likely an upper bound of capability-per-parameter, which means that there is an upper bound on "local" models, and once you need the cloud, why would the government not target clouds next?