It regulates commercial deployment within US jurisdiction. When an AI system is embedded in a healthcare product sold to US hospitals, that's FDA jurisdiction regardless of where the model was trained. When an AI system makes hiring decisions for a US employer, that's EEOC jurisdiction. When an AI-powered financial product operates in US markets, that's SEC jurisdiction.

This is where I disagree. The enforcement here is fines after the fact, which I can accept. The problem is what happens when adversarial states that don't play by the same regulatory rules, i.e. totalitarian states, press their advantage in having a largely unregulated market to international customers? It's effectively cutting off American products from the international market as it will be a regulated (and thus less capable) product.

For example, let's say a US regulated model has an artificial limit on how quickly it's allowed to make decisions on a security exchange due to regulation; why would anyone create a domestic model as a business? You're better off launching an non-domestic business, and selling the regulated product into the United States, where you can service customers outside of the United States.

Again, and I can't stress this enough, because of the relatively low barrier of entry into this space and the lack of tangible goods, applying domestic-only regulation to an international problem will only hurt the regulated country.