> I don’t get it. Am I missing something? The only thing a ban would do is protect the American market from further downward price pressure on inference, protecting VC investors in the short term.

You say you don't get it then you say exactly why they are doing it. You get it just fine.

Actual arguments are only there to make govt do something. Intent is to stop competition. With Chinese models being let's say 6 months to year behind it's quickly shrinking profit margin that even if we hit the pie in the sky AI usage numbers the American companies want us to believe, they wouldn't be able to live off with that competition