Microsoft Urges Trump to Scrap Proposed Chinese Data Center Parts Ban, Warning It Could Slow U.S. AI Expansion

Microsoft is pressing President Donald Trump’s administration to abandon a proposed ban on Chinese-made components essential to artificial intelligence data centers, warning that the restrictions could slow construction and weaken America’s position in the global AI race, Reuters reported on November 10. ⠀ The company has 35 data centers under construction across the United States and another 134 planned, according to market intelligence firm Cleanview. Microsoft representatives met White House and National Security Council officials in September to explain how the proposed restrictions could disrupt supplies. ⠀ At the center of the dispute are optical transceivers, small devices that transmit data through fiber-optic cables connecting servers and other equipment. Some data centers require millions of them, and industry representatives warn that expensive AI chips already purchased could sit unused if the connecting components become unavailable. ⠀ China supplies roughly two-thirds of the global optical transceiver market, according to Counterpoint Research. American manufacturers produce competing technology but currently lack the capacity to replace Chinese suppliers at scale. ⠀ The Federal Communications Commission is considering restrictions over national security concerns that Chinese-made components could allow Beijing to steal data, install malicious software or disrupt American data centers. The Chinese embassy rejected the allegations, accusing Washington of using national security arguments to unfairly target Chinese companies. ⠀ One option under consideration would restrict future Chinese transceivers capable of transmitting 3.2 terabits per second, technology expected to enter large-scale production in 2028. No final ban has been announced. Microsoft declined to comment, while the White House and FCC did not respond to Reuters’ inquiries.