Microsoft is asking the US government to rethink a possible ban on Chinese-made optical transceivers, tiny devices that keep data flowing fast in data centers and help transfer data between AI chips and server racks.
The company, along with the Information Technology Industry Council (ITI), says cutting off these imports could seriously slow down American tech infrastructure.
US makers cannot meet demand
Optical transceivers basically turn electrical signals into light, making quick data transfers possible in massive server rooms.
Since Chinese companies supply about two-thirds of the world's transceivers, a ban could lead to shortages and bottlenecks.
ITI Executive Vice President of Policy and General Counsel John Miller from ITI put it simply: without these parts, "Those chips, without optical transceivers, literally could just sit there waiting around unutilized until you actually have the transceivers to essentially connect them together," and US data centers might struggle to keep up with AI growth.
Right now, only two US companies make them, and they can't meet all the demand alone.