There's following the letter of the law, then there's following the spirit of the law. This is when being a robot isn't helpful.

Yes, true, but the idiom "the law is an ass" doesn't exist for no reason.

Politics created the rules; drew the line beyond which is "bad". Nvidia stayed under the line so as to comply with the rules, and yet "politics" still doesn't like it.

Do you pay the exact amount of tax you owe to the government, or do you always add a bit of extra on top to comply with the "spirit of the law"?

You could equally well argue that it's the government's fault for not expressing the spirit they intended into the letters they wrote.

Language is ambiguous. That's why we have judges.

Numbers aren't ambiguous.

That's not what happens. What happens is that the government comes out with something like "Hey, we don't want you to sell AI chips to China". Then with some beauracratic process - which almost certainly involves consulting with chip manufacturers - invents a set of rules get drawn. Then nVidia produce a SKU of their chip (note: not a new chip, a variant of one that clearly breaches the rules) that exactly matches the letter of regulation, but not the intent of the regulation.

Now, the reasonable thing to do as the regulator - is to acknowledge that the company you were asking for compliance from is acting in a hostile manner and modify the regulation to punitively clamp down on everything they're doing.

What I'm saying is that if I were the US in this situation I would be happily inviting nVidia to comply with the new rules that allows them to export anything above 100nm. Nvidia had their shot at meeting the regulation - the spirit not the letter, they blew it, they can live with the consequences.