Counter-argument: There will be at least one country that does not regulate GPU sales or access in this way, and that's where all of the AI innovation will happen. That country will get a huge lead in the next tech race, with commensurate economic advantages. Many countries will realize this and will compete to be thought leaders rather than aggressively regulate the nascent technology out of existence.
Good luck - if the US really wants it, unless they lose a lot of power, they can block any machines that can make state of the art chips from less than 10-15 years ago (SMIC depends on supplies that come from the US). Eventually China could probably catch up, but it would take a long time. No other power bloc besides US allies or China could hope to make even GPUs that could run the original 2012 Imagenet
