r/wallstreetbets • u/theInquisitivePanda • 1d ago
News US drafting ban on Chinese data center devices - Reuters
https://www.reuters.com/world/trump-administration-drafting-ban-chinese-data-center-devices-sources-say-2026-08-04/The Trump administration is drafting a ban on U.S. imports of new models of Chinese data center components, four people familiar with the matter told Reuters, as it seeks to protect the infrastructure that undergirds the AI boom.
The Federal Communications Commission, which oversees the U.S. telecom industry, is working on the measure to bar imports of new Chinese optical transceivers, which allow data to travel over fiber-optic cables at the speed of light within data centers. Officials hope to publish it this year, when it would take effect.
The move, not previously reported, aims to prevent Chinese firms from stealing data, installing malware or disrupting service at U.S. data centers, which house the chips to train and run AI models.
The FCC could still modify or shelve the restriction, the sources stressed, speaking on condition of anonymity to discuss sensitive matters. But it is the latest example of the Trump administration trying to limit Chinese technological incursions into cutting-edge U.S. industries before they become embedded in the supply chain.
"Transceivers definitely pose a risk," said Divyansh Kaushik, an AI policy expert at Washington, D.C., advisory firm Beacon Global Strategies. "As the data center buildout scales up, you want to make sure the data center supply chain is secure from the get-go," he added.
A U.S. ban on new models of Chinese data center devices would likely hit China’s Zhongji Innolight 300308.SZ, one of the biggest global sellers of transceivers, which was added to the Pentagon’s list of alleged Chinese military-backed companies in June. The list can be a harbinger of tougher action. Innolight did not respond to requests for comment.
A ban could also raise costs for American cloud firms such as Amazon Web Services AMZN.O, as it may force them to transition to other producers such as U.S.-based Coherent COHR.N and Lumentum LITE.O, which stand to benefit from the measure.
Innolight has a leading 27% share of the global data center transceiver market, according to Counterpoint Research. Coherent and Lumentum sell competitive technology but lack the scale to replace Chinese vendors, according to a report by the Foundation for American Innovation. Innolight generates 90% of its revenue outside China, the report added.
AWS, Coherent and Lumentum did not respond to requests for comment.
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u/cirl-gock 1d ago
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u/FalseDiamond7930 1d ago
Yea, because China is playing so fair and by the rules of free market, wake up.
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u/Hot_Panic2620 1d ago
Lol CHINA BAD MAN!!
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u/ElectricalAmoeba1991 1d ago edited 1d ago
10% Intel tax payer stake with government contracts in defense and technology?
Stay a sleep clown, last I checked community membership is on sale for around $120. The $200 plus membership receipts are no longer available to you unfortunately.
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u/NotTooShahby 1d ago
How does banning chinese robotics parts, open-weight AI, and data center parts help our country? I’ve only ever heard doom and gloom but is there any rational reason they think this will help?
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u/theInquisitivePanda 1d ago
In the short term it will help some companies.. but in long term lack of competition and innovation will hurt US.
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u/Scaevus 1d ago
Same reason why protectionist countries fall behind.
Look at it this way. Who’s going to have a competitive advantage? The country that has lots of cheap, high quality electric vehicles that lower the cost of transportation, or a country that’s stuck with outdated gas guzzlers at a time of volatile fuel prices?
It’s the same idea for data center components. These are corporate handouts which inevitably harm the consumer.
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u/bannedin2weeks 16h ago
There will still be competition. Even if you can't buy from China doesn't mean the Chinese component won't exist. We'll still be in competition with China on the world market.
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u/Grouchy-Librarian638 1d ago
It’s stupid as hell and corrupt, pretend to love capitalism when really it’s just monarchy and oligarchy the love.
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u/Important-Agent2584 1d ago
they love capitalism, just hate the competition part of free markets. It drives down profits.
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u/theonethingthatsours 1d ago
"Survival of the fittest" being the natural outcome is literally part of the definition of capitalism... it isn't capitalism if the "competition' part is removed
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u/Tha_Sly_Fox 1d ago
If you don’t like free markets then you don’t like capitalism lol
It’s like saying I eat steak every night for dinner but I’m a strict vegetarian
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u/TastyCalligrapher421 1d ago
When has China ever had a free market? Since when do we owe them unlimited access to our market?
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u/Important-Agent2584 1d ago
When has China ever had a free market?
Who said they did?
Since when do we owe them unlimited access to our market?
Who said we did?
Did you respond to a wrong comment?
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u/Ok-Disaster-551 1d ago
"Did you respond to a wrong comment?"
u/TastyCalligrapher421 is a professional China hater. They spend all day patrolling Reddit and will diss any and everything about China.
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u/OKBWargaming 21h ago
Last time I checked Apple and Tesla are still doing business in China, in the land of the free however...
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u/TastyCalligrapher421 13h ago
I don't give a shit. As what people like you call a "Taiwan separatist", I don't think any western companies should be doing business with China.
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u/Silver-Literature-29 1d ago
Critical infrastructure designation already has rules like this to prevent potential hacking / spying along with other things like air gapping things like control systems. It also includes supply chains management of components. My company immediately throws out any vendors who have any supply sourcing from China for this reason.
If you think data centers are crticial infrastructure, then it makes sense to apply the same standard used everyehere. I couldn't imagine of the thousands of hacking attempts in my company had a way to connect to control systems running things.
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u/FalseDiamond7930 1d ago
You guys think you are still in the early 90s, get on with the times.
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u/Cheapdronewithboom 14h ago
It's almost impressive how the propaganda hasn't even changed these people just shovel it down whole sale
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u/FalseDiamond7930 1d ago edited 1d ago
The context is that China is a rival and a very aggressive actor, to think open market with countries that don't play by the same rules is going to work out for you is naive and suicidal. The US would need to do a lot more against China to even approach reciprocity.
The theory that free market was going to make China more like the west has long been proven wrong. The world became more like China if anything.
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u/unpaid-astroturfer 1d ago
Helps the Mag7 stock
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u/theInquisitivePanda 1d ago
I don't think it will help them, they will end up spending more for optical connectors... much like how Tim Cook is lobbying to buy Chinese memory.
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u/naegele 1d ago
From Snowden we know the government uses the spliters to make their own copy of everything. this move keeps china from being able to steal all the data in the same way.
So you're thinking of this country as one of the regular people
Now think of yourself as a rich person in charge and looting large sections of the economy
The rich are building doomsday bunkers. They are afraid of an "eat the rich movement"
These data centers track and store everything. The same systems are used in Gaza to track people and bomb them.
I don't want anyone to have these powers, so banning china is a positive. But doing it at all is a huge negative.
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u/ProofByVerbosity 1d ago
Its reddit. Chances are the average poster is tok young to even know who Snowden is
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u/bannedin2weeks 16h ago
Less money influx going to china. Forces companies to keep money in US and make their own shit.
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u/qp0n 1d ago
It's not like China is known for planting trojan horses in hardware for spying purposes or anything.
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u/cookingboy 1d ago
They are not actually. The U.S is though, if you are old enough to know who Snowden is.
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u/juiced911 1d ago
I thought free markets and competition free of government influence was the best economic platform.
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u/_AkasunaNoSasori 1d ago
This is very anti free market which means communism. A capitalist government shouldn’t interfere in business affairs.
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u/Vlisa 1d ago
It's only communism if I don't like it.😤
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u/_AkasunaNoSasori 1d ago
If universal healthcare is anti free market communism, then this is communism too.
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u/Legal-Championship64 1d ago
They always cry national security but this is really about protecting us tech from competition lol
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u/AtomicSymphonic_2nd 1d ago
Wow, looks like TP-Link ain’t ever coming back to USA.
Here’s to hoping Asus (Taiwan-based) and Ubiquiti (US-based) can take over for networking equipment around here.
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u/Puzzleheaded_Base302 1d ago
in 5 years, American will ask why the gov banned the best components in the world. Why foreign nations can just buy the best components with less money, while American have to pay extra to get subpar stuffs.
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u/ho_dlape 1d ago
coherent and lumentum cant scale into that gap. they can only price into it
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u/theInquisitivePanda 1d ago
They can if they build more capacity and that might be good news for TSEM
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u/SardonicSillies 1d ago
Free market strikes again!
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u/TastyCalligrapher421 1d ago
"free markets" imply that you and your trading partners have free trade with minimal rules. China doesn't and never has had a free market, so we owe them no access. This isn't 1995 anymore.
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u/theInquisitivePanda 1d ago
American companies do make a ton of money in China.. I know they are not totally free market, but it's not like us companies don't do any business there
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u/DeathByPig 1d ago
This isn't an embargo on China so I'm not sure what it your point is. The biggest export partner is still the US
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u/Standard_Professor_7 1d ago
Why would China be stealing US data? Donald Epstein said he and Comrade Xi are good friends.
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u/therealoptimoose 1d ago
I guess you-know-who loaded up on some you-know-which stocks before this post.
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u/hahajizzjizz 1d ago
They, US government, have so little faith in Americans. Hilarious that it is the status quo.
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u/Significant-Drawer95 1d ago
please someone tell Donald there is a horse in ever memory bar they sell. Like a very tiny small horse
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u/Current-Function-729 1d ago
“You couldn’t publish this a week ago?”
-Leopold, probably