I'd guess a lot of government agencies (globally) will end up with their own compute clusters hosting open source models. Much cheaper at that scale and much less hassle than defining which critical data cannot be fed to an external llm.

Not sure if the US will fall under that since it's slightly less risky for the US government, but I wouldn't be surprised.

A lot of government agencies already started doing this and the US government is far from the only one banning on-prem Chinese open weight models. Can't answer whether this makes sense, but I do think a lot of policy makers just figure there are mostly comparable alternatives that don't carry that vague risk.