They are so dangerous they can't have video cards, we know beacuse the same people who encouraged western companies to go offshore to China for decades told us so.

The accountants told us to offshore.

The problem USG is dancing around is that this policy is probably not legal if you laid it out in the plain text, regardless of whether it's strategically desirable. If tomorrow the USG came out and said "the goal is to deny china access to these tools, prevent their ability to train their own models, etc" there would be a case in the WTO for an undeclared trade war and they would probably win, followed by retaliatory sanctions from other WTO members against the US.

AI as a technology isn't inherently military regardless of whether it has military applications - just like the computer isn't inherently military. At most it is an intensely dual-use technology, and honestly just like the computer that is completely underplaying just how radical a shift it's going to bring. It is a neutral tech that has broad applications across all areas of computing, the framing of it as being a "military technology" is kinda inherently and deliberately misleading, other than it being a box that the USG is notionally allowed to regulate.

And you can't just arbitrarily decide who "gets access to the computer" (or some other foundationally-disruptive technology) and who doesn't, in a global interconnected economy. This isn't the iron curtain where you have spheres of influence with no interdependence and you can bar the gates, that ship sailed with globalization and the 90s neoliberal "end of history" consensus. China has pushed through to multipatterned 7nm DUV nodes already, which is quite sufficient for solving the military side of the problem, if the US insists on making it a military problem.

Again though the real problem is this is an undeclared trade war, and the USG could not legally do the things it's trying to do if it just came out and admitted the de-facto regulatory standard it was actually applying, or the overall motives. Putting one over on a trade partner is not a valid reason for denying access to a foundationally-changing technology, according to the treaties the US has signed.

On the other hand... try and stop us. But the rest of the world is not deceived either, just like they're not deceived about any of the US's other realpolitik moves. we're doing it because we can, and because we think it's strategically desirable to stomp down at this moment of foundationally disruptive change.