Microsoft presses Trump to scuttle expected ban on Chinese data centre technology

Detailed summary

Optical transceivers targeted.

Microsoft has been pressing the Trump administration to halt plans to bar Chinese imports of ⁠a key ⁠component used in AI data centres, three people familiar with the situation said.

Reuters reported in August that the Trump administration wants to ban US imports of new models of Chinese optical transceivers, which allow data to travel over fiber-optic cables at the speed of light within data centres.

The concern is that they could be used by ‌Beijing to steal data, install malware or disrupt service at US data centres.

Microsoft has 35 ‌data ‌centres under construction in the US and another 134 planned, according to Cleanview, a ‌market intelligence company which tracks data centre development.

It is one of a group ⁠of companies and trade groups making the case to the Trump administration that such a ban could irreparably damage the US edge over China in the AI race by further slowing the data centre rollout, the sources said.

The cloud and software company was one of a handful of firms that met with officials from the White House ​Office of Science and Technology Policy and the National Security Council in September to flag the supply chain challenges that any such ban would present, 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 (ITI), a tech lobbying group, 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. "Those chips, without optical transceivers literally could just sit there waiting around un-utilised until you actually have the transceivers to essentially connect them together," he added.

Some data centres need millions of optical transceivers to connect servers, routers and switches.

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