It makes sense as a protectionist measure. They don't care about regular people running it locally. They want to protect their OpenAI cash cow from competition. This law would allow them to go after companies using cheaper models from China forcing them to pay for the expensive models from OpenAI. And it looks like this would apply to anything derived from Chinese models, so they could even sue people running stuff like DeepSeek as a service based in US. It's a price fixing mechanism.