Microsoft warns proposed Chinese transceiver ban could idle AI chips

Microsoft and other technology companies are urging President Trump’s administration to drop a proposed ban on imports of new Chinese optical transceivers, arguing that limited alternatives could slow U.S. data-center construction and undermine the country’s AI competitiveness. The components connect servers and other equipment over fiber-optic cables, and cloud companies warn that AI chips already purchased for planned facilities could go unused without them; Microsoft has 35 U.S. data centers under construction and 134 planned. The administration’s security concern is that Chinese-made transceivers could enable data theft, malware installation or service disruption, while the FCC is working on the proposed restriction.