Artificial Intelligence: Microsoft Apparently Wants to Prevent Ban on Chinese AI Components in the US

Microsoft and other technology giants reportedly pushed the US government to stop plans for an import ban on crucial Chinese components for AI data centers, according to insiders. Such a move could irreparably damage the US's lead over China in the artificial intelligence race, slowing down the expansion of data centers, three sources familiar with the matter told Reuters.

The issue centers on optical transceivers, which enable data transfer over fiber optic cables at the speed of light. The US government worries Beijing might use these components to steal data or disrupt US data centers. The ITI industry association warned such a ban would halt expansion. Many cloud providers had already purchased the necessary AI chips, but without the Chinese transceivers, they could not be connected.

Chinese firms Opetolink and Zhongji Innolight control the global market for optical transceivers, holding a two-thirds share, while US competitors Coherent and Lumentum reportedly lack the capacity to replace Chinese providers short-term.