Administration officials, working through the Federal Communications Commission, have moved to block imports of newer Chinese made optical transceivers on national security grounds, citing the risk that Beijing could use the hardware for espionage, service disruption or malware, Reuters reported. Microsoft has been lobbying the administration to abandon the proposal, alongside industry peers and trade associations, arguing that cutting off access would delay deployments and undermine American leadership in artificial intelligence.
Microsoft representatives met in September with officials from the White House Office of Science and Technology Policy and the National Security Council to set out the expected supply chain fallout, according to sources cited by Reuters, and the talks had not been disclosed. The company has 35 data centres under construction in the United States and a further 134 planned, according to market intelligence firm Cleanview, cited by Reuters. The Chinese embassy in Washington told Reuters that Beijing firmly opposes the United States overstretching national security concepts to suppress Chinese enterprises.