The Trump administration is drafting a ban on imports of new Chinese optical transceiver models used in United States data centers, Reuters reported on Tuesday, August 4, citing four people familiar with the matter. The Federal Communications Commission is preparing the measure as Washington seeks to secure the infrastructure supporting the rapid expansion of artificial intelligence. Officials hope to publish the restriction this year, but the sources cautioned that regulators could still alter or abandon it.
Optical transceivers are compact devices that convert electrical signals into laser pulses and back again, allowing servers and switches to move information rapidly through fiber-optic cables. They are essential to the dense networks linking processors inside modern AI facilities. The Foundation for American Innovation said nearly every switch port relies on a transceiver and that a single Nvidia GB200 cluster requires almost 18,500 of the devices, illustrating the scale of the supply-chain exposure.
According to Reuters, the contemplated approach would bar all new transceiver models and then exempt many suppliers outside China. The administration's stated concern is that vulnerable or compromised components could enable data theft, malware installation or service disruption in facilities that train and operate AI systems. A July FCC policy document separately identified optical transceivers among programmable components that commenters said could expose critical infrastructure to remote access, data collection and exploitation.
The proposed action would probably have its largest direct effect on Zhongji Innolight, a leading Chinese manufacturer that the Pentagon added in June to its list of companies it alleges have Chinese military links. Counterpoint Research estimates that Innolight holds 27 percent of the global data-center transceiver market. Reuters said the company did not answer a request for comment, while the White House and FCC also did not respond.
American cloud operators could face higher costs or delays if they have to qualify and purchase parts from other producers. U.S.-based Coherent and Lumentum offer competing technology and could benefit, but a Foundation for American Innovation analysis said they lack the scale to replace Chinese vendors immediately. That imbalance makes the proposal both a cybersecurity initiative and a test of whether domestic and allied suppliers can expand quickly enough for the AI construction boom.
China's embassy in Washington urged the United States to listen to business concerns, stop disparaging Chinese companies and end threats of sanctions, according to Reuters. It said Beijing would take necessary measures if an action materially harmed Chinese interests. The next decisive step will be publication of an FCC proposal, which would clarify its legal scope, exemptions and implementation schedule; until then, the planned ban is not final and current imports remain unaffected.
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