The stated aim is to stop Chinese firms stealing data or planting malware inside American facilities. Hyperscalers such as Amazon and Microsoft would face higher costs if Chinese optics suppliers were cut off, analyst Neil Shah wrote. “The global AI ecosystem remains heavily reliant on Chinese optical module vendors for scale execution.” Data from LightCounting, cited by Caixin, has Chinese companies holding seven of the top ten positions in optical modules worldwide. The transceivers Chinese firms build are not purely Chinese.