A bipartisan group of senators has introduced legislation to prevent the federal government from procuring Chinese-made devices that are used to transmit data in artificial intelligence data centers.
The legislation targets devices called optical transceivers, which convert electrical signals into optical signals for high-speed transmission over fiber-optic cables, then convert them back at the receiving end.
These devices have become a backbone of AI infrastructure, supporting data centers, enterprise networks, data center interconnects, and cloud networking.
“Optical transceivers are a critical part of America’s modern communications infrastructure, and we need to make sure that infrastructure is secure,” Gallego said in a statement on Sept. 28.
“Our reliance on China to produce these transceivers creates a serious national security vulnerability.”
Related Stories
In a statement, McCormick said the legislation would give American companies “the opportunity to step up, build more of this technology at home, and compete.”
The legislation would expand an existing federal procurement restriction for Chinese semiconductors to include certain Chinese optical transceivers used in national security systems, by amending Section 5949 of the National Defense Authorization Act for fiscal year 2023.
The optical transceivers covered by the legislation would be those “designed, developed, manufactured, or supplied by” two Chinese firms—Zhongji Innolight and Eoptolink Technology—as well as their subsidiaries, affiliates, or successors, according to the bill.
The Pentagon added Zhongji Innolight to its blacklist of “Chinese military companies” operating directly or indirectly in the United States in June, noting that it is indirectly owned by the State-Owned Assets Supervision and Administration Commission of China’s State Council.
Eoptolink, headquartered in Chengdu, the capital of southwestern China’s Sichuan Province, has received millions of dollars in government subsidies, according to its first-half 2026 report filed with the Shenzhen Stock Exchange.
Aside from the two Chinese companies, additional entities could be banned, should they be determined by the secretary of war or the secretary of commerce to be “owned or controlled by, or otherwise connected to, the government of a foreign country of concern,” according to the bill.
Optical transceivers, which incorporate firmware, software, or components from the two Chinese companies and other banned entities, would also be prohibited under the legislation.
If the legislation were enacted, there would be a five-year transition period before the restrictions take place.
Gallego’s office stated that the period would allow “trusted American and allied manufacturers time to expand production while minimizing disruptions to federal supply chains.”
The legislation directs the secretary of commerce to audit “optical transceiver design and production capacity” across the United States and its allies, using those findings to draft a strategy to fortify supply chains.
“Critical government communication and information systems must be safe, reliable, and free of any foreign interference, but the use of Chinese technology undermines that mission,” Cornyn said in a statement on Sept. 28.
The legislation has drawn applause from the Alliance for American Manufacturing, FDD Action, American Compass, Coalition for a Prosperous America, and New American Industrial Alliance.
Coalition for a Prosperous America said it is “indefensible” that Zhongji Innolight’s hardware continues to be found in the United States’ data centers and national security systems, even though it is blacklisted by the Pentagon.
“Chinese firms control roughly 70 percent of the global optical module market because the [Chinese Communist Party] targeted this technology for domination, and Beijing won’t let a single American-made transceiver into its own data centers,” Coalition for a Prosperous America said in a statement on Sept. 25.
It urged Congress to pass the legislation “without delay.”
New American Industrial Alliance said in a Sept. 25 statement that the legislation would “close a potential backdoor” into the most sensitive networks in the United States.
