Proposed Restrictions on Data Centre Equipment Shake Investor Confidence Across China's Technology Sector 
Shares of major Chinese artificial intelligence hardware companies fell sharply after reports that the United States is preparing to ban imports of certain Chinese-made components used in AI data centres, intensifying technology tensions between Washington and Beijing.
The proposed restrictions, reportedly being drafted by the U.S. Federal Communications Commission (FCC) under the Trump administration, target new models of Chinese optical transceivers—critical devices that enable high-speed data transmission in AI data centres.
AI Hardware Stocks Tumble
News of the proposed import ban triggered a broad sell-off in China's AI hardware sector.
The CSI300 Telecommunication Services Index dropped about 6%, while several leading optical networking companies suffered even steeper declines.
Among the hardest hit was Zhongji Innolight, one of China's largest suppliers of optical transceivers, whose shares fell around 8% in both mainland China and Hong Kong trading. Other companies, including Eoptolink Technology and Suzhou TFC Optical Communications, also recorded significant losses as investors reacted to the prospect of losing access to the U.S. market.
What the U.S. Is Planning
According to people familiar with the matter, the Trump administration is considering prohibiting imports of newly designed Chinese optical transceivers used in large-scale AI computing facilities.
U.S. officials argue that the components could present national security risks, including potential vulnerabilities that might allow data theft, malware installation or disruptions to critical digital infrastructure.
If approved, the measure would expand previous U.S. restrictions targeting Chinese technology products, including telecommunications equipment, drones and advanced robotics.
Impact on Chinese Manufacturers
The proposed restrictions would particularly affect Chinese companies that generate substantial revenue from U.S. customers.
Zhongji Innolight, for example, derives more than 60% of its revenue from the United States and is regarded as one of the world's leading manufacturers of optical networking equipment for AI data centres.
Analysts say the potential ban has added to already fragile investor sentiment surrounding China's AI hardware industry, which has faced increased geopolitical uncertainty in recent months.
U.S. Companies Could Benefit
While Chinese manufacturers came under pressure, shares of several American optical networking companies rose following the reports.
Investors expect firms such as Coherent, Lumentum, Applied Optoelectronics and Marvell Technology to benefit if Chinese competitors lose access to the U.S. market, although analysts caution that reduced competition could also increase costs for major cloud service providers expanding AI infrastructure.
Technology Rivalry Deepens
The proposed import restrictions underscore the intensifying competition between the United States and China over artificial intelligence and advanced semiconductor technologies.
Washington has steadily tightened controls on Chinese access to advanced computing technologies, while Beijing has accused the United States of using national security as a justification for limiting Chinese technological development.
Although the FCC has not yet formally adopted the proposed ban, the reports have already influenced financial markets and highlighted the growing geopolitical risks facing global AI supply chains.