Trump administration drafting FCC ban on new Chinese data center optical transceivers, Reuters reports

4 (Reuters) - The Trump administration is drafting a ban on U.S. imports of new models of Chinese data center components, four people familiar with the matter told Reuters, seeking to protect infrastructure undergirding the AI boom. The Federal Communications Commission is working on a measure to bar imports of new Chinese optical transceivers used for fiber links inside data centers. Officials hope to publish it this year, when it would take effect. Sources said the aim is to prevent Chinese firms from stealing data, installing malware, or disrupting service at U.S. data centers that house chips to train and run AI models. The FCC could still modify or shelve the restriction. The Chinese embassy in Washington said Beijing urges the United States to stop smearing Chinese companies and threatening them with sanctions, and that China will take all necessary measures in response to material harm to its interests. The White House and FCC did not respond to requests for comment. A ban would likely hit China's Zhongji Innolight, which Counterpoint Research says holds a leading 27% share of the global data center transceiver market and which was added to the Pentagon's list of alleged Chinese military-backed companies in June. It could raise costs for U.S. cloud firms such as Amazon Web Services while benefiting producers such as Coherent and Lumentum. The FCC has already curbed Chinese drones, routers, robots, and inverters via its Covered List.