The US government is moving to ban a key data center device sourced from China, escalating export controls on AI infrastructure equipment.
The Trump administration is reportedly preparing to ban Chinese-made optical transceivers from U.S. data centers, citing national security concerns about America's artificial intelligence infrastructure. Administration officials are drawing up plans to bar Chinese imports of these devices—which transmit data over fiber-optic cables inside data centers—by the end of 2026, according to four people familiar with the matter who spoke with Reuters. The Federal Communications Commission could still modify or abandon the reported restrictions.
Optical transceivers are essential components of modern communications networks, from Ethernet systems to long-distance telecommunications. They convert electrical signals into pulses of light—and back again—to transmit data through fiber-optic cables. Within AI data centers, these transceivers provide the high-speed optical links connecting thousands of AI chips needed to process enormous data sets and train large language models such as ChatGPT and Claude.
The proposed ban reflects the expanding U.S.-China competition beyond chips and algorithms to the infrastructure necessary to run them. The U.S. has already tightened export controls on advanced AI chips to China in an effort to prevent technologies that could give the People's Liberation Army a battlefield advantage and erode America's technological lead. Simultaneously, U.S. intelligence agencies have detected Chinese state-backed hackers accessing critical American infrastructure and consumer devices, demonstrating the potential to collect intelligence or disrupt key systems during a future crisis.
U.S. officials increasingly worry that relying on Chinese suppliers for optical transceivers and similar components exposes the country to supply chain vulnerabilities. "As with the risk from the other products the Trump Administration is looking to ban, there are real concerns with the transceivers around data collection, disruption, and long term dependence on Chinese suppliers," said Adam Segal, director of the Council on Foreign Relations' Digital and Cyberspace Policy Program.
Dmitri Alperovitch, chairman of Silverado Policy Accelerator, added: "Banning imports of Chinese-made optical transceivers would further help secure the AI supply chain and reduce dependencies on China that they are capable of weaponizing against us, as they have repeatedly done with rare earths." China has demonstrated this willingness by leveraging its dominance over rare earth minerals—critical for everything from smartphones and electric vehicles to fighter aircraft and missile systems. Recently, China tightened export curbs on Japan in retaliation for Prime Minister Sanae Takaichi's defense build-up and comments about Taiwan.
However, analysts warn the ban could carry economic costs. "There is the risk that it raises costs and uncertainty for hyperscalers if it happens, with negative impacts on AI development, at least in the short term," Segal said, referring to companies like Amazon that operate massive cloud computing infrastructure.
China has criticized U.S. restrictions on advanced technology exports, contending they undermine global supply chains and damage bilateral relations. "Such practices do no good to anyone. They are market-distorting acts of bullying. China urges the U.S. side to immediately revoke the relevant measures and its wrongful practices," said Liu Chang, spokesperson for the Chinese embassy in Washington.
The White House did not immediately respond to a request for comment.