Actually this would be pretty great, because it would incentivize US labs to pursue the open weights strategy for the same reasons China is currently.

I genuinely think that this is what the trends and incentives point toward: Competition to develop open weights models and to develop efficient inference hardware to run them.

This would be good! But government policy could very easily screw it up.

That's if American models fall behind Chinese ones. Why would Americans open source when they can create a Monopoly?