The White House is reportedly crafting new restrictions aimed at securing the AI supply chain by blocking imports of Chinese-made optical transceivers, critical components in modern data centers. According to Reuters, the Federal Communications Commission (FCC) is developing a proposal that would prohibit future imports of new models of these high-speed fiber-optic transceivers.
The move is driven by national security concerns. U.S. officials worry that Chinese transceivers could be exploited for data theft, malware injection, or service disruption inside the vast data centers that power frontier AI models. “Transceivers definitely pose a risk,” warned Divyansh Kaushik, an AI policy expert at Beacon Global Strategies, emphasizing the need to secure the data center supply chain from the outset.
The proposed rules draw lessons from the earlier Huawei fiasco, where deeply embedded Chinese telecom gear proved costly and time-consuming to replace. The new restrictions would add to existing limitations on Chinese-made humanoid robots and other tech, escalating the broader U.S.-China decoupling in critical technologies.
China has already pushed back. Its embassy in Washington urged the U.S. to stop targeting Chinese firms and threatened “all necessary measures” in retaliation. Beijing could leverage its dominance in rare-earth minerals, crucial for many high-tech components. Meanwhile, the ban could disproportionately impact Chinese firms like Zhongji Innolight, which controls roughly 27% of the global data center transceiver market, while benefiting U.S.-based makers such as Coherent and Lumentum.
Although the proposal is not yet final, it signals the Trump administration’s intent to extend the AI arms race into hardware supply chains. The plan coincides with parallel efforts to restrict Chinese open-weight AI models, a push that has faced resistance from U.S. tech leaders like Meta’s Mark Zuckerberg, who favors competition over bans.
