Microsoft has been pressing the Trump administration to halt plans to bar U.S. imports of new models of Chinese optical transceivers used in AI data centers, three people familiar with the situation told Reuters. The Federal Communications Commission is working on the ban, Reuters reported in an exclusive carried in full by Yahoo News. Microsoft declined to comment, and the White House and the FCC did not immediately respond, Reuters said.
Reuters reported in August that the administration wants to ban those imports over concern they could be used to steal data, install malware, or disrupt service at U.S. data centers. Optical transceivers move data over fiber-optic cables inside data centers, the report said.
Microsoft has 35 data centers under construction in the United States and another 134 planned, according to Cleanview, a market intelligence firm cited by Reuters. The company was among a handful of firms that met officials from the White House Office of Science and Technology Policy and the National Security Council in September to flag supply-chain challenges, two of the sources said.
“It really threatens to arguably grind (the data center rollout) to a halt,” said John Miller, general counsel of the Information Technology Industry Council, which has publicly urged the administration not to move forward with a ban. He said many cloud companies have already purchased the AI chips needed for the buildout, and that without transceivers those chips “could just sit there waiting around un-utilized.” The group sent a letter to the FCC on Aug. 13 calling on it to “refrain from adding optical transceivers” to a trade blacklist, Reuters reported.
China accounts for two-thirds of the global optical transceiver market, according to Counterpoint Research, as reported by Reuters. U.S. firms Coherent and Lumentum produce competing products but lack the scale to replace Chinese vendors, according to a Foundation for American Innovation report cited by Reuters. Morgan Stanley said in an October client note that the administration was considering barring Chinese transceivers capable of handling 3.2 terabits of data per second, with production not expected to ramp up until 2028 and widespread installation in 2029. Two of the sources said that threshold is under consideration. The FCC has not addressed the issue publicly, Reuters said.
In September, a bipartisan group of U.S. lawmakers introduced legislation to bar the federal government from equipping sensitive government systems with Chinese-made optical transceivers, Reuters reported. The Chinese embassy in Washington said Beijing “firmly opposes the U.S. overstretching the concept of national security and abusing state power to unjustifiably suppress Chinese companies.”
AI Tech Daily previously explained how the U.S. outbound investment ban on Chinese AI works.
Sources
- Yahoo News full reprint of Reuters: Exclusive-Microsoft presses Trump to scuttle expected ban on Chinese data center technology, by Alexandra Alper (November 10, 2026)
- The Hindu Business Line reprint of Reuters: Microsoft opposes proposed US ban on Chinese optical transceivers (November 10, 2026)
- Investing.com recap of Reuters: Microsoft pushes Trump to halt Chinese data center component ban (November 10, 2026)
- AI Tech Daily: How America’s outbound investment ban on Chinese AI works, and who it covers (October 29, 2026)