US lawmakers move to bar Chinese optical transceivers from sensitive government systems

A bipartisan group of US lawmakers introduced legislation on Friday, September 25, to bar the federal government from equipping sensitive systems with Chinese-made components that transmit data in AI data centers. The bill targets optical transceivers, the devices that carry data between servers over fiber-optic cables.

What the bill covers

Optical transceivers convert electrical signals into optical ones so data can travel over fiber at the speed of light. They sit at the heart of the American AI infrastructure rollout: some data centers require millions of them. The proposal adds to growing pressure on Chinese transceiver makers, which dominate the market for parts critical to AI data centers.

Supporters say the components could be used by Beijing to disrupt access to US AI tools and cloud services. The restriction would apply to transceivers made by China's Eoptolink and Zhongji Innolight, while the Secretaries of Commerce and Defense would gain the authority to add more companies to the list later.

Who is behind the bill

The legislation was introduced by Republicans John Cornyn and Dave McCormick together with Democrats John Fetterman and Ruben Gallego. "We shouldn't rely on China for technologies that are essential to our national security," McCormick said, according to a press release. Cornyn said critical government communication and information systems must be safe, reliable and free of any foreign interference, and argued that the use of Chinese technology undermines that mission.

Industry pushback

Parts of the US technology industry argue that cutting off Chinese suppliers would slow the domestic AI infrastructure buildout and cede ground to China while hyperscalers search for alternatives. The Information Technology Industry Council wrote to the FCC on August 13 asking the agency to "refrain from adding optical transceivers" to a trade blacklist, stressing the potential effects of supply disruptions on data center deployment and US AI leadership.

US-based Coherent and Lumentum sell competing products but lack the scale to replace Chinese vendors, according to a report by the Foundation for American Innovation. Neither company responded immediately to a request for comment.

What happens next

The Chinese Embassy and the companies Eoptolink and Zhongji Innolight did not immediately respond to requests for comment. Innolight was added to a Pentagon list of companies alleged to have ties to China's military.

If the legislation is approved, the government would have five years to comply with the new requirements.