FCC drafts ban on new Chinese-made AI data-center optical transceivers

The Federal Communications Commission is drafting a rule to ban imports of new models of Chinese-made optical transceivers used inside AI data centers, according to people familiar with the plan.

The draft would primarily hit Zhongji Innolight, which holds about 27% of the global data-center transceiver market, according to Counterpoint Research. Zhongji was added in June 2026 to a Pentagon list of companies it alleges are linked to the Chinese military, the people said.

Optical transceivers convert electrical signals into optical ones for the fiber-optic links that shuttle data between servers inside AI data centers. As AI clusters scale, demand for high-speed transceivers has surged, turning a once-obscure component into a fresh pressure point in the US-China contest over AI hardware.

The proposal would exempt many non-Chinese manufacturers and has not been finalized. The FCC hopes to publish it before the end of 2026, though the plan could still be modified or shelved, the people said.

US manufacturers Coherent Corp and Lumentum Holdings, along with Applied Optoelectronics, are seen as the likeliest beneficiaries if the rule takes effect.

The account rests on a single set of reports attributed to four people familiar with the matter. No draft has been published, no rule has been proposed formally, and the FCC has not commented on the record, so the plan should be read as an unconfirmed early-stage proposal rather than settled policy.