U.S.-China Tech War Escalates! Trump Administration Plans Ban on Chinese-Made 'Optical Transceivers': Preventing Data Centers from Becoming Spy Havens

Four知情 sources told Reuters that the Trump administration is drafting a ban on importing new Chinese-made data center components to safeguard the infrastructure underpinning the artificial intelligence (AI) boom. According to the report, the Federal Communications Commission (FCC), the U.S. telecommunications regulator, is preparing measures to prohibit the import of new Chinese-made optical transceivers—devices that enable data to travel at the speed of light within data centers via fiber-optic cables. Officials aim for the ban to be announced and take effect this year.

Previously undisclosed, this move is intended to prevent Chinese companies from stealing data, implanting malicious software, or disrupting U.S. data center operations. These data centers house the chips needed to train and run AI models.

The sources, speaking anonymously due to the sensitivity of the issue, said the FCC might still modify or suspend these restrictions. This marks the latest example of the Trump administration attempting to set limits before Chinese technology infiltrates America's cutting-edge industries.

Divyansh Kaushik, an AI policy expert at Washington-based security consultancy Beacon Global Strategies, said: 'Transceivers do pose risks. As data centers scale up, you want to ensure supply chain security from the outset.'

Neither the White House nor the FCC responded to requests for comment. The Chinese Embassy in the United States stated that Beijing urges Washington to 'heed the objective and rational voices of businesses in both countries' and 'stop smearing Chinese companies and threatening sanctions.' It added: 'China will take all necessary measures in response to any actions that cause substantial harm to its interests.'

A ban on new Chinese-made data center equipment is expected to hit Zhongji Innolight, one of the world's largest transceiver suppliers. The company was added in June to the U.S. Department of Defense's list of entities suspected of having ties to the Chinese military—a designation that could signal impending harsher sanctions. Zhongji Innolight did not respond to requests for comment.

The ban could also increase costs for U.S. cloud providers such as Amazon Web Services (AWS), as they may be forced to switch to domestic suppliers like Coherent and Lumentum. The latter two would benefit from the ban.