Microsoft Presses Trump to Scrap FCC Ban on Chinese Transceivers

Microsoft is lobbying the Trump administration to drop an expected FCC rule that would block imports of new Chinese optical transceivers, the fiber-optic parts that shuttle data between GPUs inside AI data centers, Reuters reported. The company has 35 US data centers under construction and 134 more planned, per Cleanview figures cited in the reporting, and it took part in September 2026 meetings with the White House Office of Science and Technology Policy that focused on AI supply chain risks.

The FCC is reportedly weighing a cap at 3.2 terabits per second. Western production of transceivers at that speed is not expected to ramp until 2028, with widespread installation only in 2029. Chinese suppliers, led by Eoptolink and Zhongji Innolight, control roughly two-thirds of the global optical transceiver market, according to Counterpoint Research. Zhongji Innolight is listed by the Pentagon as a Chinese military-backed firm. US-based alternatives Coherent and Lumentum lack the scale to replace them.

"It really threatens to arguably grind (the data center rollout) to a halt," John Miller, general counsel of the Information Technology Industry Council, told Reuters. Without the parts, he warned, purchased AI chips "could just sit there waiting around unutilized."

The administration has been weighing the ban since at least August 2026. The FCC has not publicly discussed the optical transceiver proposal.

The fight sits alongside a steady run of AI infrastructure stories on our tracker this week, from an ING data-center loan syndication to Alibaba's T-Head chip-unit Hong Kong listing clearance.