The Trump administration is reportedly drafting a ban on US imports of new models of Chinese datacenter components, targeting the optical transceivers that form a critical layer of AI infrastructure1.
Four people familiar with the matter told Reuters that the Federal Communications Commission is developing a measure to bar imports of new Chinese optical transceivers, which allow data to travel over fiber-optic cables at the speed of light within datacenters. Officials hope to publish the measure this year, according to Reuters.
Optical transceivers convert data into light pulses and back again2. The reported FCC plan is aimed at preventing Chinese firms from stealing data or installing malware, according to the South China Morning Post. The ban would target Chinese-made optical transceivers used in datacenters powering AI development.
Markets reacted swiftly. Shares in Zhongji Innolight dived as much as 16 percent on Wednesday following the report.
ANALYSIS The move would represent a new front in US-China technology restrictions, extending controls beyond chips and chip-making equipment into the networking hardware that connects GPU clusters inside datacenters. Optical transceivers are essential for high-bandwidth communication between servers during AI model training, meaning a ban could force US datacenter operators to source these components from non-Chinese suppliers.
The choice of the FCC as the regulatory vehicle is notable — the agency oversees telecommunications equipment rather than export controls, suggesting the administration is framing the issue as a domestic infrastructure security concern rather than a trade restriction.
The sharp sell-off in Zhongji Innolight stock indicates the market views the company as significantly exposed to US datacenter demand for optical transceivers.