Microsoft and other companies and groups are pressuring the US administration to not to implement a planned ban on imports of Chinese-made optical transceivers, arguing that doing so could weaken the US in the AI race against China, Reuters reported.

The Windows maker, which is building dozens of data centres, was one of a handful of companies that met with officials from the White House Office of Science and Technology Policy and the National Security Council in September to voice concerns about the ban and its potential effect on data centre supply chains, the report said, citing unnamed people familiar with the matter.

Data centre rollout

Optical transceivers link data centre components at high speed, with Chinese companies controlling two-thirds of the global market for the components, according to Counterpoint Research.

Lobbying group Information Technology Industry Council (ITI) reportedly sent a letter to the US Federal Communications Commission in August calling on it to refrain from adding optical transceivers to a trade blacklist, due to the potential effects of supply disruptions on data centre deployment

Next-gen threshold

Morgan Stanley said in an October research note that the US administration was considering a ban on Chinese optical transceivers with data speeds of 3.2 gigabits per second or more, targeting a technology that’s not expected to reach volume production until 2028.

Such a threshold would give US companies time to ramp up production. Reuters’ report cited people as confirming that the threshold was being considered.