Comment by hgoel

This is definitely part of it. I think the reports/PR over the past month ended up being a serious unforced error.

Chinese models are increasingly closer to the frontier, while being able to run on much cheaper hardware than what US frontier models run on.

On top of that, both Anthropic and OpenAI showed that they can't really be trusted on data security.

Even if US companies can be forced to not use Chinese models, the rest of the world is going to see the risks and the availability of good enough open weight models for their purposes and be more likely to lean in favor of self-hosted Chinese models or local inference clouds.