Didn't everyone already know that China was buying Nvidia GPUs?

Is the problem that Nvidia was not making it as hard as it should have?

Realistically, how much does that even matter?

Because the government, empowered by the people, have decided it matters, as a matter of national security.

There's is no argument to be had about this specifically. You can argue whether this is true or not, but that's not relevant to this subject. If Nvidia still decides to ignore the government, it'd be not only completely, absolutely fair, to nationalize the corporation, but the country itself has a duty to its citizens to do such thing.

Now legislators demonstrated how much that matters. I don't have the knowledge to evaluate the national security concerns. But from the outcome, it's a matter they'll firmly push as a long term strategy, even at the cost of one of the world's most visionary CEOs.

They and their shareholders are about to find out how much it matters.