Trump Administration Plans Ban on Chinese Data Center Components to Boost U.S. Infrastructure Security
The Trump administration is preparing new restrictions that could block imports of certain Chinese-made data center components, according to four people familiar with the discussions. The proposal is part of a broader effort to strengthen the security of the infrastructure powering the rapid expansion of artificial intelligence in the United States.
Officials at the U.S. Federal Communications Commission (FCC) are drafting rules that would prohibit imports of new Chinese optical transceivers—critical networking devices that transmit high-speed data through fiber-optic cables inside data centers. Sources said regulators are aiming to release the measure before the end of the year, although the proposal could still be revised or abandoned.
The initiative is intended to reduce cybersecurity risks linked to Chinese technology, including concerns that foreign-made networking equipment could be exploited to collect sensitive information, install malicious software, or interfere with operations at facilities that host AI computing systems.
People familiar with the discussions cautioned that the proposal remains under review and no final decision has been made. Even so, it reflects the administration's continuing push to reduce U.S. dependence on Chinese technology in sectors considered strategically important.
Divyansh Kaushik, an AI policy specialist at Beacon Global Strategies, said optical transceivers represent a potential security concern because they are essential to the operation of modern data centers. He noted that securing the supply chain early is increasingly important as AI infrastructure expands across the country.
The report lifted shares of several American optical networking companies. Lumentum, Coherent, and Applied Optoelectronics all posted strong gains as investors anticipated they could benefit if Chinese competitors face new import restrictions.
China Warns of Countermeasures
Neither the White House nor the FCC commented on the reported proposal. China's embassy in Washington criticized the potential restrictions, urging the United States to avoid targeting Chinese companies and warning that Beijing would take necessary action if its economic interests were harmed.
A ban would likely affect Zhongji Innolight, one of the world's largest manufacturers of optical transceivers. The company was added to the Pentagon's list of firms alleged to have links to China's military earlier this year, a designation that often signals the possibility of further U.S. restrictions. Innolight did not immediately comment on the report.
Industry analysts say new import limits could also increase costs for American cloud service providers, including Amazon Web Services, which rely on optical networking equipment for large-scale data centers. Companies may need to shift purchases toward U.S.-based suppliers such as Coherent and Lumentum if Chinese products become unavailable.
The proposed restrictions also reflect lessons learned from the Huawei case, where Chinese telecommunications equipment became deeply integrated into U.S. networks before Washington imposed sweeping sanctions. Removing that infrastructure has proven costly and time-consuming, prompting policymakers to take earlier action in emerging technology sectors.
According to market research firm Counterpoint Research, Innolight controls roughly 27% of the global data center transceiver market, making it one of the industry's largest suppliers. Although U.S. manufacturers produce competing products, analysts say they currently lack the production scale needed to fully replace Chinese suppliers. Research from the Foundation for American Innovation also notes that approximately 90% of Innolight's revenue is generated outside China, highlighting its significant presence in international markets.