Microsoft Urges Trump Administration to Drop Proposed Ban on Chinese AI Data Centre Components

Microsoft is urging the Trump administration to reconsider its proposed ban on imports of Chinese optical transceivers, a critical component used in AI data centres. The company, along with other technology firms and industry groups, has warned that the restrictions could disrupt supply chains and slow the expansion of US data centre infrastructure, potentially weakening the country’s competitive position in the global AI race. The proposed ban stems from national security concerns that Chinese-made devices could be exploited to steal data, install malware or disrupt operations.

Microsoft reportedly raised its concerns during meetings with officials from the White House Office of Science and Technology Policy and the National Security Council in September. The company currently has 35 data centres under construction in the US, with another 134 planned. Industry representatives argue that without sufficient optical transceivers, expensive AI chips already purchased by cloud companies could remain unused, delaying critical infrastructure projects. China currently accounts for around two-thirds of the global optical transceiver market, while US manufacturers Coherent and Lumentum lack the production capacity to fully replace Chinese suppliers.

The Federal Communications Commission (FCC) is examining the proposed restrictions, with a possible threshold targeting high-speed optical transceivers capable of handling 3.2 terabits per second reportedly under consideration. Such a move could give American manufacturers time to expand production before the technology becomes widely deployed. Meanwhile, bipartisan US lawmakers have introduced legislation seeking to prevent Chinese-made optical transceivers from being used in sensitive government systems. The debate highlights the growing tension between national security priorities and the technology industry’s need for reliable supply chains as the global race to develop AI infrastructure intensifies.

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